It’s been said before: In a number of ways, we are not like our parents’ generation. Things will always change. Bottom line, we often think and act differently from our parents.
Perhaps new technology and the digital revolution spring to mind first? It’s true. From the fax and laptop to smart phones and wearable technology, the world looks and works in many new, and evolving, ways.
What’s also true is our change in attitude and actions when it comes to personal debt. In 2012, the Globe and Mail reported on a poll conducted by a firm of bankruptcy trustees. The results show that most Canadians are quite comfortable with using debt as a financial strategy. Yet, this was a time when debt loads had risen to alarming new highs. The survey found that nine out of 10 respondents would consider borrowing money to cover an unexpected expense that was not an emergency.
By contrast, in the 1960s, families frequently lived a ‘middle class’ lifestyle and managed to own a home on one income (usually the Dad’s). The mindset was typically to save for needed things—rather than to borrow. And, this lifestyle rarely included the additional luxuries we see fairly common in our lives today: second cars, cable TV, eating out, vacations and plane travel, smart phones and tablets, pricey gym or golf memberships, designer duds etc.
The downside to our view of what constitutes the appropriate lifestyle of the 21st century is that to acquire and maintain this level of consumerism we may spend more than we earn (a concept that would rarely be considered acceptable in the 1960s)! In our work at Grant Thornton, we often see where this can lead: Consistently living beyond ones means, borrowing, excessive purchasing and maximizing high-interest credit cards can put individuals and families into highly stressful situations with increasing debt loads (whether we believe we can afford it or not).
Our role is to help people address their debt problems and find ways to rebuild a solid financial future. We can help with tips and reminders so that you may not need our assistance again in the future, including: disaster proof your life (get your life insurance and an emergency fund in place), spend less than you earn, aggressively pay down high interest debt, read the fine print on any purchase agreements (you may be liable for significant interest payments if you miss the eventual payment due date) and delay consumption (save for that vacation rather than charge it).
If you are facing financial struggles or would like some help with managing your debt—one of our professionals is available to discuss your situation. There are many options available, ask us about a consumer proposal. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free at 310 8888.