Banking on financial discipline

The current world crisis in the financial markets is food for thought for all of us. It has become clear that easy access to credit, a marked characteristic especially of British and American economies, could fast become a recipe for disaster.

The "live for the day" culture is certainly corrosive both socially and morally. More than greed, it is a lack of proper discipline with one's finances. In Europe we tend to be more conservative with our money although it is apparent that these credit trends strongly advertised by banks and financial institutions are starting to creep into our lifestyles. Our traditional financial discipline of saving may still be strong among the older generations but probably not so much among our younger generations.

In the last 25 odd years, lifestyles and spending habits have transformed the Maltese character even more than in any other time before. It has been a long-standing tradition of the Maltese to be thrifty and sometimes overly so. At times scrimping and sometimes excessive hoarding could possibly have been a side effect of our isolation and perturbed past. This has definitely changed thanks to increased prosperity, political stability and a successful transition to the modern economic world. Today, thanks to political, economic and technological developments, we have access to possibilities unheard of up to a few decades ago.

There has been a marked improvement in our standard of living. We have more comfortable homes, nicer cars and 101 gadgets. All of this has had its side effects. One gets the sneaky suspicion that our personal financial management arrangements have probably slacked too much and this seems more marked among the younger generations. It seems to me that the spending patterns of many of our youths revolve around mobile phones, the purchase of luxury (and often useless) items and the quest for unlimited socialising. Of course, there's no harm in any of this! It's all part of being young and having fun.

What is worrying is that all this may sometimes lead to over spending and a growing disregard for saving for the future or a rainy day. Debt and unsecured lending through credit cards and other long-standing payment arrangements fuel the situation even further. As parents we are in duty bound to instil in our children the basic tools for life and setting oneself a budget and sticking to it must surely be one of those lessons. All this becomes more relevant when one considers that for most of us financial planning will eventually affect our future pension plans.

I sometimes get the impression that people often pay little attention to the tariffs and charges they pay. There is in a sense a weakness in our culture of looking for value for money in what we buy and consume. Possibly, we consume too much and can't be bothered! It is easy to point the finger at the usual suspect. The government and its agencies should always be vigilant, yet, we as consumers should not shed our responsibilities in doing our very best to get the best value for our hard-earned cash, thus, rewarding those service providers who foster this with our custom.