Change the Name. Change the Mindset.

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The name of something can have a big impact on how we perceive that thing.

The name can hide a lot of the risks but also turn people off from the good parts by sounding dull and boring.

So here are a few names of products and vehicles within personal finance I think should change, and some suggestions of what these could be changed to.

Credit Cards > Debt Cards

Credit cards can be a big issue for people if they don’t keep an eye on them. It can often be someone’s only option to keep their head above water

But it’s very easy for people to fall into the credit card trap, especially if banks are eager to offer large lines of credit to people who really shouldn’t be given them.

It can also be difficult for people to recognise credit card debt as a serious problem in need for fixing asap. If someone only needs to make the minimum payments, why not take that offer to free up a little bit of pub money? It doesn’t make financial sense, but it’s understandable when you can just do a credit transfer so it becomes a problem for another month.

But maybe people’s apathy towards this sort of debt lies more in the name than the numbers on their screen.

Yes the bank is issuing lines of credit, but you’re ultimately in debt to the bank until the time you pay that balance off in full.

These aren’t credit cards, they’re cards that are putting you in debt to the bank; they’re debt cards.

And we should address it as such to put the issue front and centre by naming the product as such.

Want to take another credit card out sir?

OR

Want to take out another debt card sir?

I know which one is more likely to make me think twice about doing so.

Pension > Future Freedom Fund

The most boring word in money management: pensions.

Say it to anyone who has no interest in personal finance and they’ll roll their eyes or you’ll see them immediately glaze over.

It’s so far off for many people that putting money aside each month when you’re under 40 can feel like your money is disappearing into thin air with each pay cheque.

Many people, especially at the moment, are struggling to pull together a little emergency buffer, let alone putting money aside that they’ll hopefully access in 20/30/40 years time.

Because of people’s apathy towards the topic of pensions, people often turn off to the opportunities and benefits they offer. They’re literally the thing that’s going to allow you to never have to work again. It’s giving you the ‘freedom’ to choose what you want to do with your days, rather than relying on an employer.

But it’s important to reiterate this is a long-term investment. This is you future freedom fund. You’ll need to be patient over multi-decades but the payoff is the freedom these funds will eventually afford.

Using adjectives like ‘freedom’ instead of a blanket noun like ‘pensions’ is at least more likely to peak people’s interests.

Just the word itself doesn’t inspire much confidence. The /p/ plosive – formed by pushing the upper and lower lip together and forcing out a short, sharp burst of air – is harsh sounding and is immediately followed by the short unrounded /e/ vowel. A nasal /n/ follows, made by putting your tongue against the ridge just behind your top teeth and forcing the air out of your nose. This occurs again at the end of the word. Everything about the formation of the word is forced; phonetically it’s a chore to say. This is obviously nit picking, but money management is 99% psychology, so even small things like this could be preventing psychological barriers.

I’ve suggested three words to replace the one, but these words flow a lot better through the alliteration of the fricative /f/ phoneme. If it’s easier to say and it’s catchy, people are going to take a little more notice.

Overdraft > Debt

Overdrafts can have the same issue as credit cards.

You can fall into a hole with them and it can be very difficult to dig yourself out of it.

Overdraft just reminds me of a nice bar in my old Uni town, and the word doesn’t strike me as one I should avoid at all costs.

It almost became a joke during my time at Uni between friends. Most of us were in some form of overdraft and it was accepted and normalised, shrugged off as just another debt obligation attached to the Uni experience.

But it should be avoided at all costs. Take a few hours a week at a bar or shop (pre and post-Covid obviously) without it taking too much time away from Uni commitments, obviously.

Don’t allow yourself to normalise the word overdraft until it gets to the point (like me) where you associate it more with alcohol than you do actual debt that YOU WILL HAVE TO PAY BACK…and potentially with interest.

A draft is a slightly annoying breeze you might experience when you’ve left your window open a little too long. It’s not something that should be avoided or needs sorting right away.

Let’s stop associating debt with this word. It’s a debt card just like it’s ‘credit’ counterpart above. Let’s say it how it is so people can better understand exactly what they’re committing to.

Student Debt > Student Tax

This probably applies more to the plan 2 student loan of post-2012. I wrote about this here.

We need to stop the shock-factor rhetoric about how much debt graduates are in. They’re not…really.

It works almost exactly like a tax, and it should be titled as such. There are many other paths to choose other than University. But don’t let ‘student debt’ be the reason you don’t at least consider it.

*

The name of something is the window by which we perceive the details underneath. If the detail underneath has a negative impact, it should be revealed in the title/name straight away for everyone to see.

A lack of transparency can be a big issue in personal finance and investing. What better way to start being more open by revealing the downsides (or upsides) in the name of the thing itself.

So what do you think? Do you agree we should make these changes or if it’d even be worth it?

And if you can think of any others, let me know in the comments below.

One thought on “Change the Name. Change the Mindset.

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