Banking for Children

G said: “Daddy, I don’t want to go to school; I hate school.”

“Why, G?” I replied.  “You always have a lovely time at school.  I wish I was at your school.”

“But it’s so long.  I want to be at home.  With you.”

“But I wouldn’t be at home with you.  I’m have to go to work”

“Why, Daddy?”

“Well, because we have a mortgage to pay.”

“What is a mortgage?”

“Well, a mortgage is how we pay for our house.  A house costs a huge amount of money to buy, and so a bank lends us the money and then we have to pay it back, and also give the bank money in return for lending us the mortgage.  Eventually, you pay back about twice as much as you borrow.”

“What!!  That’s really greedy!  Greedy banks!  I hate banks!”

Now that was an interesting conversation.  Are the banks greedy?  Well, in terms of lending me money to buy a house, I’m not sure.  What would I do otherwise, where could I get the money together to buy a house if not through a mortgage.  I’m not independently wealthy, so have to go to work, which means I have to live somewhere, and I have to pay the gas, electricity, council tax etc etc, as well as the mortgage.  I don’t live in a huge palace, yet the mortgage takes up a considerable chunk of my income.  Although I enjoy my work, and am lucky enough to work for a good company that looks after me and is flexible in balancing my work and home needs, at the end of the day, at the end of the day, I only work because I have to.  I have a responsibility to my family to keep a roof over their heads and food on the table.

So I've willingly put myself into this Faustian bargain because I want to own my home, yet I'm limited in my lifestyle by the enormous cost of housing, and the fact that wherever I look, the banks want a huge amount in return for lending me a mortgage.

It's a difficult thing to explain to the under-fives, how the economy works, and how our lives are shaped around that economy.  Imagine then, the trouble I'm going to have explaining the intricacies of the global debt system, and all the things that caused the recession.  But these are things they're going to have to understand if they're going to avoid the mistakes our generation have made.