519-646-2222Stop buying more debt
All Canadians want to “buy a house” or at least they say they do, in reality though they are simply buying more debt. No one ever bought a house by adding a HELOC or another mortgage to the housing debt pool. Is it a lack of education, a sign of low intelligence, or a sign of following a broken social narrative, that leads people to keep buying more debt?
When you go too a furniture store and finance the purchase of a living room suite you are actually buying more debt, ironically you are not even buying it with today’s income, you are buying the debt with your future income, ensuring that you and your family will not be able to afford other things in years to come. In fact you are guaranteeing that you and your family will face financial challenges in the future.
If you are obsessed with buying new debt, often to pay for old debt that you couldn’t afford to pay off – what fantasy are you telling yourself about your lifestyle choices? “Hey honey, look the credit card company just gave us another $5,000 on our credit card – let’s take the kids out for dinner“. Yup, we have heard it all, seen it play out right in front of us. You didn’t buy dinner, you just bought more debt.
Stop it!!! For goodness sake. You buy a house when, and only when, you make the last mortgage payment. The most probable reason for marital failure is lack of communication, the most frequent cause of communication problems within families is financial stress. The joys of overspending on credit facilities fade quite quickly when the bills come in.
The real reasons for Canadians being global leaders in household debt revolve around lack of regulation of the financial industry, very high taxes and declining incomes. You cannot budget your way out of debt and you cannot debt your way out of debt. Wealthy government officials attend at committee meetings to discuss the debt crisis, yet they always fail to find any realistic solution – if I were sufficiently cynical I would suggest that these are smoke and mirror sideshows to shift the blame from themselves to ordinary working people struggling to get through life.
Try living for one full year without using debt for any other reason than to purchase a car and/or a house. No credit card vacations or family dinners, if you can’t afford work another shift/job, save your money. Poorly conceived reports have been cited in the media indicating that 19% of Canadians intend to buy a home in the next year, most of them are completely insolvent – but they still “intend to buy a home” – the statistic is probably about the same as the number who intend to win the lottery in the next year!
The Canadian economy is in a mess, we can probably all agree on that, but can we talk about how to fix it? Every time you buy more debt you are transferring your money to some rich person, the person lending you money and collecting interest. Change your expectations, lower them, having a place to live to live that is dry, warm and relatively safe is far more important than overextending yourself on debt to create the illusion of success.