During the course of running some errands a few days ago, we ran into some friends, Ken & Patti, and took some time to have lunch. Knowing my passion is this personal debt issue, a story about these people’s daughter and son-in-law came up.

Apparently this young couple had come over to our friends’ house to watch the Super Bowl game. During the course of the evening the young couple announced that they had eliminated all of their debt.

As the story unfolded, they had taken a home equity loan and paid off all their bills. They were very proud of this achievement.

A Quick Tip :

Why The – Powers That Be – Don’t Want Us Financially Savvy

Ken told his son-in-law, he was happy for them but that really all they had done was move the debt; they hadn’t eliminated any debt whatsoever. His son-in-law was disturbed that Ken couldn’t understand that the DEBT was gone. Ken asked if they still had the credit cards and other consumer accounts open.

The son-in-law said: “Well, of course. You can’t get by today without them ”

Ken again said, all they’d done was move the debt; they’d be in the same shape a couple of years from now as they were in BEFORE the home equity loan. At each commercial break during the game Ken explained slowly and methodically that unless and until a person deals with the problem, it doesn’t get fixed.

He pointed out that the US Bureau of Economic Analysis estimates that personal savings, as a percentage of disposable personal income, has been in negative territory now since the summer of 2005.

That means the average household is spending more money than the household brings in. We’re simply not saving as a society.

He told his son-in-law, the constant bombardment of messages the lenders are sending out is making less than smart folks believe they’re out of debt when they consolidate. In reality all they’re doing is moving the debt.

During half-time, they took out a sheet of paper and sat at the kitchen table. Ken drew circles on the paper showing the amount of debt owed on the house on one circle.

Another showed the amount they’d owed on the house before the home equity loan. In another circle he showed the amount they owed on the car before the refinance. Another showed the credit card and consumer debt.

After seeing that the total debt still remained in the bigger house circle and had just been moved from one circle to another circle, the son-in law said he understood. Ken instinctively felt he hadn’t.

He didn’t want to press the issue any further, so he dropped the subject. He asked me, how he could have explained it in a way this young man could understand.

I told him he did the best he could and stopped just about where he should have. In reality his son-in-law doesn’t want to hear such things, especially from him.

After all this is 2007 and things aren’t the same today as they were in ancient times, the sixties.

I suggested that all he can do as a dad and father-in-law is set an example by standing by his convictions. Next time it comes up he might lay out little hints about how he and Patti struggled with these same issues in their lives.

He can mention what helped them realize the truth and move them away from all the flowery, puffy messages they were bombarded with, way back in the Fred and Wilma days.

We talked about how hard it was for young families today, seeing all this stuff and wanting to get it and get it now. We talked about the struggle they deal with overcoming the addiction to the plastic’s representation of an unlimited supply of money. In reality these young people have to be ready to hear the advice.

Ken bought a copy of the book and is going to give it to his son-in-law. I asked him to be subtle about it, not to seem pushy. Unfortunately his son-in-law is not ready yet. All our friend can do is set the example; hope for the best, try to hold his comments, and HOPE they’ll see it eventually.