I started my first job in banking in January of 1989. I was excited to go from being in retail sales (my former job as a cosmetologist lost its luster quickly and I went into retail sales) to having a “real job” as a bank teller. I moved up within a year, even though I was only 24, to the position of teller supervisor at the small local bank chain and was loving learning about money and lending.
The Worst Financial Advice – from a bank?
In 1992 or so, our small chain was bought out by a bigger chain. My bank branch was closed and my position was eliminated, and I got hired on at a nearby branch for the new bank chain as a teller. This bigger bank chain was much more adept at sales and such, and I was excited to be working for the “big boys” of the local banking industry now. Being the obedient girl that I was, I learned all that I could, obeyed all of the rules and set about to be the best teller I could be until it was time for me to move up in the ranks again. I was learning a ton about sales, upselling and marketing, and was determined to be a standout employee.
Each quarter we’d have a different product sales goal, and were rewarded in many different ways for good performance in convincing the customer of their need for the particular product of the quarter. We’d also get cool t-shirts to wear on casual Friday, promoting whatever product we were selling that quarter.
One particular quarter, we were promoting the bank’s credit card. Our bright red t-shirts were colorful and engaging, and they went perfectly with jeans. The slogan on the back of the shirt – even though I didn’t realize it at the time – would turn out to be the worst financial advice I ever received.
It read: Better living through plastic.
As all good and obedient employees did, I drank the koolaid they were selling and firmly believed, as we were taught in our marketing session, that by offering customers the bank’s credit card, we were opening a door of “better living” to them – a door that would allow them to live a “better” life.
I continued to drink that koolaid and believe that lie when I got promoted to customer service rep, then to loan banker, and eventually to sales assistant for one of the city’s top mortgage branch managers.
We were consistently praised for what a wonderful “help” we were being for customers as we “helped” them to open credit cards, take out loans for various items, and “helped” them get approved for the maximum mortgage amount we could get them approved for. If they could make the payments, what was the problem, right?
The Beginning of the Wake Up Call
In the last year of my job as the mortgage sales assistant, I did a mortgage application for a guy who made $500k a year and was buying a $500k home. The guy was about 40, was married, had kids, and had NO debt. I had a knack in those days for really connecting with customers, so we began chatting casually as we talked each day about his mortgage. I’d never met anyone who made 500k a year before, so my first “personal” question to him, being the perpetual learner that I am, was:
“Do you have to work and be away from your family a lot to make that kind of cash?” I asked.
“During the first years I did,” he said. “But now I’ve built a team who does the sales work, and I really don’t spend more than 40 hours a week managing them.”
Holy crap. Making 500k a year working 40 hours a week. Nice. This was when I first started to learn that the right planning can lead to success, that it’s not all about “luck”.
Recommended reading: Unfair Advantage: The Power of Financial Education
During the course of our conversations, he mentioned to me that he’d planned to have the mortgage on this home paid off in just 5 years. He wanted to retire early and didn’t like having debt.
When I heard him say that, I felt like I was talking to somebody speaking a foreign language. For 15 years I’d been “groomed” by the banking industry that borrowing money was a “good” thing – a thing that allowed people to have now what they would’ve normally had to wait years to have. I was confused, but of course mesmerized by this guy’s different approach to life.
After I left the banking industry at the end of 2003 to be a stay-at-home mom, I continued my “better living through plastic” lifestyle, but never forgot about the “odd” guy that wanted to pay off his $500k mortgage in 5 years.
In 2013, after getting to that “rock bottom” place in our finances, I started to learn from personal finance blogs that the “odd” customer with the great financial picture really knew what he was talking about. And I learned that he wasn’t alone in his quest to be financially secure.
Now I see that “better living through plastic” t-shirt for what it is; a seductive evil message created by the bank to make money regardless of the impact it has on its customers. Sounds a bit “Occupy Wall Streetish” I know.
Recommended reading: Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Ind ependence: Revised and Updated for the 21st Century
I’m a big believer in capitalism and the freedom to have and run a business as one sees fit. But I’m also a big believer in people educating themselves on the ways of money, credit and its dangers. We as consumers have a responsibility to take our lives and our education into our own hands, not allowing banks or anyone else to dupe us into believing that they know what’s best for us and our families. For that reason, I encourage you to sign up to receive The Frugal Farmer’s posts each day (see the sidebar), and to come along with us as we learn physical, financial and spiritual self-sufficiency. Never again will we drink the koolaid without first testing the waters.
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The whole “better living through plastic” is what many of us have been taught for years. Same as get a job and work for 30 or 40 years too. Just because others are doing it that way doesn’t mean we need to follow. A great reminder Laurie!
Exactly, Brian! Time to stop following the crowd and start swimming upstream. 🙂
Oh man. And the other koolaid many lenders seem to drink is how much money the borrower can afford to borrow. It’s funny how I used to think bankers knew so much about money (my mom was one!) but the more I learn about money, the less I believe that – in general.
Me too, Kirsten! I look back and am amazed that I really believed we were doing customers a favor. Egg on my face there, big time. 🙁
It’s tough to find out that what you learned at your job isn’t always what’s best for people. Changing that mindset can be difficult.
It sure can, but man, am I glad I know better now. 🙂
I remember getting my first credit card and thinking, “I’ll only use this for emergencies.” Amazing how quickly I burned up my limit and would get it right back there when it rarely got paid down. While I didn’t think I was bad with money because I was the best with it in my family, I see now that we all sucked at good finance, I just was a little “less bad” at it.
Also, when we got our house here, first we were harassed that we weren’t borrowing enough, since we were approved for way more than we wanted to spend. Then, we had to jump through all sorts of hoops at closing even though we had the assets to pay off the entire house if needed. I’d hate to see what we’d have to do if we had gotten suckered into a bigger mortgage.
“a little less bad”. Lots of wisdom there, Mr. SSC. These lenders so often encourage us to borrow, borrow, borrow, and then they’ve got us over a barrel. Not good. 🙁
Ouch, Laurie! Clearly we as consumers need to remember that banks are in it for the profit first, and if that conflicts with what’s truly in consumers’ best interest, they’re generally willing to overlook that. At the same time, I also believe that we need to take responsibility for our own actions. Chase may have made it really easy for me to charge thousands of dollars, but I was ultimately the one swiping the card. 🙂
I believed for a long time that because I had good ethics, that surely everyone did. It’s taken a lot of mistakes to learn that there are many self-serving, undermining companies and individuals out there, and that I need to watch out for myself/my family or no one else will.
It seems like many are drinking the Koolaid because living on the plastic, borrowing money to live a lifestyle that is unaffordable appears to be the norm. I remember a while back when a bank representative was trying to sell me on some investment product which seemed every complicated. They made it seem like it was a “sure thing” and that you can’t lose money. But it was just too complex, and if I can’t understand the product and they can’t explain it well then it’s better I not invest in it.
Agreed, Andrew! I’ve adopted the same principle now, along with many others that are very anti-norm.
I totally drank the plastic kool-aid when I started working. High credit limits make you believe that you have more money than you really do and it’s easy to get caught up in a downward spiral of overspending. I am thankful too that I have stopped the insanity, but it was not without a lot of pain along the way.
I hear you, Shannon! The financial services industry is largely about “servicing” its own pocketbook and not very much at all about servicing the customer.
I don’t dislike credit cards. I use them and believe they can be a very helpful tool, but what I do dislike is the disconnect between marketing and reality with them. I’ve been talking to my girls about credit cards since they were toddlers because I don’t want them to fear them but know how to use them responsibly. Plastic cards don’t make your life better; smart money choices do.
“The disconnect between marketing and reality with them”. That’s a great way to put it, Shannon. We got oldest daughter her first credit card (as an authorized user on mine) and she’s very careful to only use it when cash isn’t convenient and she has the means to pay it off immediately.
Wow, Laurie, you and I have such a similar story. I worked at a small community bank for 7 years – in customer service mainly. It truly is a great company, but they do sell credit cards. We had a script for how to promote credit cards to people. And we’d earn $5 for every approved application. One day, they asked me to teach a class called “Get Smart About Credit” at a local high school. It was a giant credit card sales pitch. I refused to teach that lesson, because I had gotten smart about credit in a VERY different way – as in, debt is not a tool!
Oh dear! Isn’t it sad that they called it a “Get Smart About Credit” program when that wasn’t at all the goal of the class? Good for you, Laura, for standing up for what’s right and refusing the teach the lesson.
Craziness! I’m glad you woke up, but it’s a tough lesson. It’s so easy to drink the kool aid. Even though I’m travel hacking a bit, I am not one of those people that think you should use your credit card for everything.
I agree, Melanie. I think most people have to be very careful with them.
I’m glad I didn’t fall into the cycle of credit card debt, as my student loan debt is enough by itself! I got my first credit card after graduating college, and I’ve treated it as if it was debit card ever since. I wanted to earn the rewards, and I realized that if I was paying interest of my balance the rewards essentially became useless.
SO happy for you that you knew and followed the smart route early on. I’m sure student loan debt is NOT fun, but credit card debt can be a never-ending cycle for so many people. Thanks for the comment, DH!
Now I’m curious, what did that guy do for a living?! I always find it interesting to learn how other people do it. I hate debt and hope to get out from under it soon!
I only remember that he was in some sort of sales. What kind of sales, I don’t recall.
There’s a reason for caveat emptor. The consumer has to be on guard, as no one’s looking out for him in the marketplace. When it comes to money lending, it’s doubly true.
Amen to that, my friend!
This is exactly why I held off getting a credit card for the longest time. I wanted to set my finances up for success by only committing to them once I was 100% certain I would be able to use them responsibly. Thanks for sharing Laurie!
Such a smart move, Anum! You must have had good mentors, or else you’re just really smart. 🙂
What a story! Such a different mindset. I would never have guess this about you Laurie:)
There’s a lot of things about me that most people would’ve never guessed. Think inner city street fights and bodybuilding expert. 🙂
This one has a lot to say, but in the end I think it’s a reminder to live below your means, make 20K spend 19K, not make 20K spend 29K. Thanks.
Perfectly put, Steven. Perfectly put. 🙂
I was drinking that Kool aid right there with you. It is so great to finally realize that there are people like that gentleman who wanted to pay off his home in 5 years. It’s not normal and most people would never grasp the beauty in that plan, but I’m so glad you and I do.
Kim, you and me both. SO glad those days of ignorance/denial are behind us!!
That was definitely the worst thing about sales, for me, was “being good at” talking people into spending on things you KNOW they didn´t need, could buy cheaper elsewhere, or couldn´t afford. Ugh. When I realize I was “so good at sales” it makes me so glad I got out, despite the career uncertainty I´m facing now. I still have friends who think I´m nuts. “Sales are where the money is at!” they tell me–but no, I can´t go back to that.
Good for you, Chela!!! It’s amazing how easy it is for them to convince people that that type of sales is “good” for people. Not all sales jobs are bad, of course, but when you’re working to sell people things without honesty, that’s a problem. Congrats on standing up for what’s right for you, my friend.
The worst financial advice I received was “There Is Good Debt and Bad Debt”. I thought “Is there such a thing as “good” debt?” Of course, none. Whoever advised that to me? She gotta think twice.
Yeah, I’m not a big fan of the “good debt” theory. To me, all debt puts people in bondage to a lender, and that’s never good.
I got a small department store charge account fresh out of college to buy clothes for my new job. It wasn’t large but I struggled to make the monthly payments until it was paid off. Then it hit me…if I can’t find the money to save up and pay cash, how can I find the money to pay the monthly charge account bill? Duh!
Ugh, I hear you, Kathy! Oh, the lies we believe!
Glad that you cited Your Money Or Your Life as recommended reading. It was that book that really focued us to start tracking every penny we spent. I have not read the up-dated version as yet.
I worked in insurance during the 80s and early 90s. I did not fit in but I learned a great deal about data bases and records management which led to other jobs that I really loved.
Glad you liked that book! I enjoyed it as well. I would imagine it would’ve been quite a learning experience working in insurance. One of the jobs that I learned a lot in (next to banking) was when I worked at age 18 as a bookkeeper for an electronics company. Little detailed work that’s right up my alley!
I have downloaded a sample of the up-dated YMOYL to my “tablet-thingy” – frugal way to see if I want/need to buy any books.
Yes looking back I learned a lot in that job. It was the first time that I used computers. When I first started there we had no computers and worked everything out Einstein-style as we called it – on the back of an envelope!
LOL, I still do that to this day. LOVE my paper, pens and paper filing system. I do use an Excel spreadsheet for spend-tracking, but that’s about as far as it goes technology wise. 🙂
This is a great article, Laurie! I worked at a small local bank earlier in my career, too, but luckily we didn’t try to push credit cards on people.
When I was in college, however, I worked in retail and getting people to open up credit cards was a huge focus of my job. Turns out I was pretty good at it too. Whenever we got someone to open a credit card, we would announce “IC (our name)” over the intercom for the whole store to hear. My coworkers got so used to hearing my name, they dubbed me the “IC Queen.” Now I have learned my lesson with credit cards and feel bad that I had a part to play in so many new accounts being opened. I was just trying to be an obedient employee like you were at the bank.
Now I am trying to educate others on the dangers of debt through my blog and sharing fantastic articles like this one.
Yes, we are definitely making up for our past mistakes, aren’t we, Monica? And that’s the important part. 🙂
It’s scary when you realize that banks and lenders do not necessarily have their customer’s best interests at heart! I suppose it’s not profitable for them to tell people to live below their means and avoid debt ;). I’m glad you’re spreading that message though–it needs to be heard!
LOL, I suppose not. 🙂 Yes, I need to make up for those years of telling people how much “wonderful” credit we could give them! 🙂
Wow isn’t that crazy that that slogan existed? At point in my life I’m sure I drank the same Koolaid, but now that kind of just pisses me off! 🙂
I know!!! Seriously, people? What were they thinking when they made that slogan??
I worked as a teller too, but have since moved into Marketing for the same bank.
A lot of the people I know who work for the bank, make some of the worst financial decisions. But it’s true, they don’t know better. They’ve been groomed to think of loans and credit cards as good things–that constantly being in debt is no big deal.
They buy fancy suits, own big houses, and drive nice cars. But I also know they can bitch about their jobs with the best of them, and yet, here they are. Everyday working the job they honestly dislike maybe even hate because they can’t afford to do otherwise.
At the end, they get a nice watch and some food while mingling with people they never really got to know over their 35 year career. When they make their little speech about being with the company, and plans afterwards, it’s always about taking some vacations, golfing, and seeing their grandkids more. None of them realize they could have been doing that 20 years earlier if they didn’t have that debt chained around them. It’s depressing to be around, honestly, and I am learning some new job skills to get out.
Very well said, Mr. FI!!! You put into words the exact vision in my head that I myself couldn’t put into words!!! It really can be a very deceptive industry. Good thing you recognize it for what it is and don’t drink the koolaid.