It looks like Dora and I are about to buy an apartment. We’re very excited about this. We like the building, the location, and most of all, we like the apartment itself. We’ve made an offer, and if the loan goes through we’ll be living in a recently renovated building that was constructed in 1900. Our apartment would be a two bedroom on the second floor (In the US you’d call it the third floor) in very central part of town.
I’m excited to stop paying rent, which brings me to the subject of today’s post:
Hungary’s culture of savings versus America’s culture of debt.
In a country full of financial paradox: where you must have a bank account in order to hold a job, yet the banks charge predatory fees; where the government recently raised taxes, but cut government services; where if you want to run a small business, you have to pay $500 in monthly fees, regardless of how much money you make – in a country like this, people have learned to view the exchange of money as an opportunity to “screw” or “be screwed.”
The result is that Hungarians avoid debt or borrowing of any kind, because it looks so much like an opportunity to be screwed.
For the most part:
Hungarians don’t rent apartments. They live with their parents until they can buy.
Hungarians don’t purchase anything in installments. They will drive their old beater until they have enough to buy a new car.
Hungarians don’t carry credit debt. Allowing yourself to be charged interest doesn’t make sense to a Hungarian.
Things are changing slowly. Home loans are picking up steam, and credit card offers are becoming more visible, but it is so different from the consumer driven culture I knew back in the States. That is: If you want it, you can have it now (strings attached).
Distrust is not always a good quality, but I can’t help but admire the Hungarian attitude of economic distrust. No matter the country, people do questionable things in the name of money; people in banking and government are no exception.
In America, our distrust of government has successfully kept taxes relatively low, but we continue to throw interest payments at banks like they’ve done something tremendous to deserve it.
I never liked credit card debt, but it felt like the natural state of being in the States. Which makes me wonder about the whole consumer confidence rating. They make such a big deal out of that number, but if half of the people “spending” are simply going further into debt, then that’s not consumer confidence; it’s lender confidence.
I think maybe Americans could use a little of the Hungarian distrust. People in the States seem to believe that $25,000 of credit is a favor, but Hungarians would see that as a trap. Maybe the adolescent free-market economy over here has something to teach its more mature role-model over there.