By NATARIO McKENZIE
Tribune Business Reporter
Bahamians are unable and unwilling to save because they have "too much debt", a banker yesterday urging his countrymnen to become more disciplined and abandon the "materialistic approach".
Gregory Bethel, Fidelity Bank (Bahamas) president, argued that too many Bahamians are simply living from "pay cheque to pay cheque". His comments came as the Central Bank, in partnership with the Clearing Banks Association (CBA), announced the launch of the "Get Smart Bahamas Financial Literacy Campaign", which is being supported by Colina Financial Advisors (CFAL) and Blue Orchid Bahamas.
"Too many Bahamians live from pay cheque to pay cheque, and three to four times a year they make contact with their bank to increase their credit card limit or consumer loan, and then one day - all of a sudden - they end up old, lonely and broke all at the same time, and that ought not to happen," Mr Bethel said.
"In this campaign we seek to educate Bahamians on how they should approach their finances and, simply put, it starts with setting goals and then using a monthly budget to put aside money in order to fund those goals.
"For large goals you will need to borrow money, and that needs to be done in a responsible way. Bahamians need to learn how to shop and compare, how to understand the products so they make better decisions. Bahamians also need to be taught how to increase their income that will add to their savings."
Mr Bethel added that Bahamians must stop borrowing to buy pleasure and possessions to maintain popularity. "Bahamians are unable to say or unwilling to save because they have too much debt," he said.
"They have credit card payments, consumer loan payments and mortgage payments. We need to come to understand that we must stop borrowing money to buy pleasure and possessions, and to maintain our popularity, and only borrow money for useful purposes - to buy an asset that is going to increase in value or to consolidate all of your debt and have a lower monthly payment, so that you are able to save or buy a small used car instead of that brand new luxury car."
Mr Bethel added: "We have to cut back on our spending, we have to minimse our debt, and then we will have money available for saving and investing. It's a discipline that each one of us needs to develop and move away from this materialistic approach."
Central Bank Governor, John Rolle, said savings should not be viewed independently from debt. "If you are trying to save and you are not paying attention to debt, then you're not going to succeed. If you do a good job of keeping a handle on debt, the more likely you are to succeed at saving."