I recently watched the documentary Maxed Out about “Hard Times, Easy Credit and the Era of Predatory Lenders” in America.
The documentary is phenomenal and reminds me of Michael Moore and Morgan Spurlock, although maybe a little less humour. The statistics are shocking, but lets not think that it is really all that much different in Australia. In reality there are more and more people stuck in the debt cycle – because, that is what it truly is, debt. “Credit” sounds so much nicer, but in reality it is debt, which doesn’t sound quite so nice.
The thing I find most humbling is that, despite all our frugality and paying our credit card in full each month, we are still living at least part of the month in advance of our “pay cheque”. The interest we pay on our home loan funds one of the “big four” banks who are preying on unwary consumers and encouraging people to rack up debt.
While getting completely out of debt is out of our immediate reach at this point in time, we can realistically look at getting ahead of the game and stop the “too much month at the end of the money” problem.
Watch the documentary and tell me what you think.