Avia Ustanny, Freelance WriterWANT A credit card?" "No, thank you." The surprising response comes from new entrants into the job market who, though being seduced by all and sundry into pocketing credit cards, taking out mortgages and moving a truck load of furnishings on hire-purchase into their bed-sits, are saying no, refusing the pleasures of instant gratification.
The financial crash of the nineties has birthed a new generation, it appears. The young have learnt from the experience of fathers and mothers hamstrung by debt and are turning their backs on unrestrained borrowing. This is a group which seems to be much more fiscally responsible, labelling themselves the 'cash generation'.
While it does appear that there are dozens who have turned to illegal (drug mules included) and corrupt means of earning the extra dollars and paying for the luxuries they need, the evidence available to us says that the once traditional culture of conspicuous consumption is ailing.
Sophia Neet (not her real name) a bank employee, is 29 and saving earnestly towards her first home. She hates the idea of renting, but is patiently waiting to qualify for the 5 per cent mortgage offered by her company. She has returned furniture to Courts Jamaica Limited when her monthly payments threatened to swamp her savings goals. She purchased a second-hand car cash to take herself and her son around and continues to throw her 'pardner' to meet the goal of making a down payment on a house. "I make budgets every minute. I write down what I need to buy and everything I spend," she says. There are many more like her.
The banks are feeling the pinch of the more conservative climate and though they travel from business place to business place to crank up their loan rate, the results they desire are yet to be seen.
The building society of the Bank of Nova Scotia, 3 months into its new 10.8 per cent mortgage offering to graduates, has only managed to disburse $100 million of the $500 million. Among those who have been in the job market for five years and less, the better paid group of lawyers and doctors are the ones who have taken the financing option. And, though the loan ceiling is $5 million, the average borrower from the group is sticking to real estate valued at $3 million and less.
Others have stayed away. Fear of debt, financial analyst Hopeton Morrison says, is part and parcel of the current economic climate. "Debt is a function of your own sense of financial independence. Those who are fortunate enough to get a job are uncertain about the permanence of that job. In this situation you really do not want to saddle yourself with debt," Mr. Morrison states.
He opines, "When people are doing well, they get two, three credit cards and go for Master Card Gold. But, if you are unsure about the job, you don't."
In keeping with the general caution, many graduates have avoided moving out on their own, choosing instead to remain with their parents. Notes Morrison, "This is a significant change from my generation when early in the game many would leave home. Now some get married and live on the same premises. "
The fact that many also leave school with large student loans is another disincentive to borrow. They are not creditworthy, and neither do they want additional loans.
