Drowning in Debt

Congratulations Canada you are Team #1 in World Debt. Really? Why in the and what in the fack is going on here with us?

A recent Ipsos survey revealed some startling results that I just had to talk about and also if I can find the same to be true in my own family and life experiences.

Well I have four millenial children and all of them are mired in debt but I have not heard any of them yet say they would give up a kidney to get out of debt.

How Bad Is It?

• 1/3 can not meet their monthly bills
• 50% said they are within $200 of not being able to meet bill payments
• 4/10 reveal they live in fear of an interest rate hike
• the average family has only $631 left after bills and deb payments
• 48% say they will have to go further in debt to meet monthly obligations
• 4/10 also say they lie to their partner about finances

In a further Equifax report just released days ago Canadians owed 1.8 Trillion dollars. That's up from the previous quarter and it just seems to be growing.

The average debt balance came in at $22,837 up another 3.3% from the previous three months.

Another Global News poll conducted in December 2017 found that the average Canadian owed $8,539.50 in non-mortgage consumer debt.

We are also spending $1.70 for every dollar we make. Our debt to spending ratio is the highest in the world.

How Did We Get Here?

Interest rates have been at generational lows and we have been gorging on cheap debt. The problem is even the hint at a mere .25% hike in rates sends families into a spin. There is just no room in the budget for an increased monthly payment. What can you do about it?

The best book I've ever read on money, spending, budgeting and how to get control of your life is Your Money or Your Life. It has been fully updated for 2018. You will learn the steps needed to take control of your finances and life.

I absolutely love this book. I just wish I could get my kids to read and study it's principles.

The problem with reading books is they are tossed soon afterward. You must ACT on the information and put it into use in your own life. You really have nothing to lose.

Ways to Avoid Debt

Common sense is just not as common as it used to be. As all the surveys noted above Canadians just can't help themselves by spending money they don't have. We are a nation of money morons, debt dummies and stooges of saving money. What to do, as if anyone hasn't heard of this or at most even listen. Alas, this is a blog about my experiences so here goes;

• use cash when possible
• if you use a credit card for a purchase, when you get home pay off the amount right away. Don't wait for the bill to come due
• only a moron spends money they don't have
• pay off your credit card in full when you get it, ALWAYS!
• get rid of student debt ( work while you go to school and summers) live at home NOT residence unless your rich. Yes it's tough but not as tough as being a debt slave.
• don't buy a car, if you must, buy used. Use cash when you do. All other options are what debt dummies do. Don't do that.

Kids who own cars never have money. If you go to school STOP going into debt taking bird courses with NO future possibility of turning that debt and education into a job. Explore you're job prospects before you commit.

Education is big big business, it is also a total waste of time and money if you can't get a job immediately after you're done. Factories requiring just high school are chock a block full of former students with diplomas and degrees.

The high schoolers don't have any student debt. They get it. No more room for an Arts degree in the world. Gee, how did that happen.

Don't get me wrong and start hating, getting a higher education is great, but only great when you have a job at the end of the term.
If not, what's the f'n point?

In Sum

It's real hard but try you must to stay away from debt. You just become a slave and you lose all sovereignty to decide when and where to work and even if you should and have to work.

I mean, if you don't owe money you can decide what to do. When you owe the bank, credit card company or car dealer you work for them. You're smarter than that and a life free of debt is the only way to live.

Related Post: Investing Victim or Contrarian - Which One Are You? 

Recommended Reading: Debt Free Forever