BORROWING

Borrowing occurs at all levels. This treatise will focus on the most common type: personal borrowing. Although the greatest amounts of money are borrowed by governments and industry, the average person is most concerned with personal loans, and he most worry is about the smallest sums.

Late automobile loans are a problem, but there are many solutions including riding the bus or with a co-worker. But a high school student may be terrified because she cannot repay a paltry $10 loan. (A few girls have even attempted suicide.) A few pennies have even resulted in a bloody nose, but I have seldom heard of discussions about debts in schools (with the exception of calculations of interest rates in a 1923 mathematics text.) Even middle schools should spend some time addressing personal borrowing.

There are times and places when an individual should borrow or even beg for money. Everyone needs to learn how to manage money. (This was why my parents gave me an allowance of fifteen cents a week when I was in first grade.) I learned to save, but I had a nickel to buy a candy bar once in a while. I was encouraged to save, and I did. I bought a house when I was twenty years old. I had saved enough money to put 20% down on a four family starter.

By contrast a young man of the same age in this neighborhood inherited a mortgage free home, but he liquidated it and squandered the money on foolish pleasure. He probably had never had any bank account in his life. By contrast when each of my daughters reached the age of twelve years, I took her to a local bank to open an account in her name.

The examples above show the need for everyone to learn how to handle money. There are basic rules about handling money:

1. Benjamin Franklin said, "Neither a borrower nor a lender be."
2. Be very cautious when you ignore Mr. Franklin. If you have little or no money, remember his words every day.
3. Credit accounts are one of the foundations of success in capitalism.
4. Peace of mind is built on a positive net worth (exclusive of life and health insurance).
5. Daily loans should be limited to .25 M'U (mour units [qv]), and be repaid within 48 hours.
6. Weekly loans should be retired within six weeks so that there is no more need to borrow because the debts have been paid. Larger loans with weekly repayment schedules should be paid without excuses.
7. BUDGETING: monthly using a standard 4 week month
1. Rent, Mortgage (including taxes)
2. Utilities (Electric, Gas, Oil, Fuel)
3. [my personal] Church & Charity
4. Monthly Bills - Credit Cards, etc.
5. Grocery and pocket cash
6. Entertainment & Restaurant Food
7. Savings & Investments

With a Budget a person, a family, a city, a state, or a nation can better control and plan for current and future needs. Truth and Honesty are the foundations for real and meaningful budgets and plans. Just as invective jabs between husband and wife across the kitchen (budget) table can be just as destructive and ineffective as the lies and exaggerations of government officials.

If our nation is going to grow and succeed, the leaders and legislators MUST put the needs and success of our nation ahead of their own personal and political party power and wealth. From 1789 until 1829 the six men who served as President of the United States were all personal friends of one another. John Adams and Thomas Jefferson were political adversaries, but they shared such a strong friendship and respect for each other and our nation that they marched into eternity together, dying within hours of each other on the fiftieth anniversary of our nation's birth.

          When to borrow or not

1. To buy a home or improve it
2. To buy a car or repair it
3. Never borrow when the repayment schedule cannot fit into a balanced budget
4. Save up for vacations
5. Let your children get their own student loans
6. Never borrow money to give it away
7. Don't borrow to buy insurance; budget