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Canadians are not listening ...
Every single month for the last year the Bank of Canada and/or the Finance Minister has issued a warning to the public about our debt load. Last month it was announced that the average Canadian now carries more debt than the average American for the first time in 12 years.
The Americans are learning their lession about financial frivolousness the hard way and are we taking notes and/or rethinking our decisions about our finances? No, we think that it won't happen to us.
TD issued a warning this week that 1 out of 10 households will not be able to meet payments when interest rates start to rise (which the bank of canada has assured us they will). That means that 10% of homes will be foreclosed upon!
I am frustrated with Canadians but the WTF is the government doing? They keep issuing warnings to us but we are not listening.
Re: Canadians are not listening ...
They were talking about this on the radio the other day, and I was so annoyed. The DJ kept going on and on about how nervy those "fat cats" were to tell us what to do with our money, and how people can't help running up debt to make ends meet.
Uh, yeah, they can. Sure, there are some people who are truly stuck between a rock and hard place and have no room to make cuts. The vast majority of Canadians, however, just need to get their spending in check before we have a similar situation here as they do in the States. People need to be realistic about what they can and can't afford.
Like you said, I think it is that people believe that it won't happen. I also think a lot of people feel like they need things that they don't really need, and they are willing to put themselves into debt to have those things.
This is one lesson that I got when we did our marriage prep course. There was a couple that were there to talk to us about parenting topics, and they had four kids with one on the way. Everybody was asking how they could afford to have so many kids, and they explained that they only have what they need to have like a modest house, one car, etc. I found it inspiring, and I often find myself second-guessing purchases that I wouldn't have thought twice about before because of that.
What are they saying interest rates will go up to anyway?
I'm really hoping we have our debt paid off or at least a comfortable chunk of it when the interest rates go up. We didn't worry about debt when we first started dating and got married. Big mistake. We have been working on it and I was so happy that in Dec and Jan we would finally get rid of 2 of our bills. I had been looking forward to it for a few months. So while we now are 2 bills less (well, as of tuesday) we have a hefty loan to pay back to my IL's because DH got laid off and we went through our savings between the move, doing basic fixes on the house for winter, and DH being off work for 2 months now.
We're definitely trying to listen over here...
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It's interesting, actually, that we were more spendy when we had little money and are much more frugal now that we both make good livings. I went through a period in my life, before I met DH, where I made some serious errors in judgement and behaviour with respect to debt and my credit. I learned the hard way. DH has always had a mind for business/numbers and is mor eof a big picture guy so he's never had issues with debt.
I was raised in a household that had huge fluctuations in income and what we could afford...my parents were not good with their money and lived as though it was ok to carry a tremendous debt load through life. I saw them struggle and I do not want to live that way.
I wish more people would better differntiate between wants and needs. It's a slippery slope that can lead to serious financial problems.
The Bank of Canada or experts do not give a official time of when interest rates will rise but they have assured us they will. They have said it will be a well-paced steady rise over the next couple years.
When I was younger I did make a lot of mistakes with money as well. I took on debt too easily. Even though it caused great stress for me it seemed to make my ex-fiance happy to spend spend spend so I went along with it. Every since he left 5 years ago so did my bad ways with money. I budget, track and save.
Its funny Mel, that you mention now that you make good money you are much more frugal because I am exact same way. The more money I have the less I want to spend.