ra·tion·al : based on or in accordance with reason or logic
It is public knowledge that quite a lot of Mauritian families are in debt, 75% of them it would seem (but I can’t find an official online source for that percentage).
According to me, this is partly because people are not taught the basics of finance when they are kids and, when they become adults, they sometimes become irrational in their behaviour and in their relationship with money. For instance, a lot of us buy things that we don’t need. There is fad at this moment in Mauritius to get an iPhone 6, a Samsung Galaxy S6 or a LG G4 at Rs 30,000 no matter whether we need such a powerful device (and can use it properly) or not. And, as you have surely noticed, Ébène is the cathedral of expensive clothes, shoes, cars and other gimmicks that don’t contribute one iota to our happiness levels but which cost a lot of money.
Fortunately, today, I overheard some people talking:
- One was explaining the mechanism of loans to his friends. He was telling them how compound interests worked. How it was rational to settle a loan early (if possible of course) so as not to pay a lot of interest. And, interestingly, he also mentioned that he had asked his bank to reduce his credit card limit in order for him to spend less every month.
- Crossing the road, I heard another guy having a phone conversation with a friend or a family member. He was explaining how irrational it was to buy something by contracting a debt. He was explaining that if he only had Rs 2500 and he had to buy something (hopefully useful) at Rs 5000, he would wait another month to have the Rs 5000 instead of buying through higher purchase (because of the very high interest rates).
I was amazed. My first impression that people lacked financial judgement was clearly wrong. Apparently, some of us are very rational as far as money is concerned. And these people are willing to share their knowledge with others.
This is a very good thing for the future of the Mauritian society.
What do you think?