"Debt is the slavery of the free"

For some god-awful reason I decided to see what was on television one afternoon. I came across 'Til Debt Do Us Part which details couples' financial circumstances and resolves their budgetary predicaments. Shock came across me. One episode featured a couple who had a new tv, a mini fridge, game system, and dvds in their original packaging in their living room. Big deal - virtually everyone has such luxuries in their home. The host goes on to outline the couple's debts: Three credit cards with $24,000 owing on them, a $35,000 line of credit, two car loans totaling $23,000, student loan of $3700, $3000 owing on back taxes, and the tv (bought on a buy now pay later plan) - $2200. A colossal debt of over $100,000!! Spending is also an issue. In addition to paying the mortgage, loans, and bills, $1500 a month is spent on food (groceries, restaurants, and alcohol), $650 on home decor, $550 on clothes, $500 on electronics, and another $500 disappears in bank charges and fees... What is most surprising is that together their net income is $89,000 and they have no children. What the h*ll is going on??

I decided to investigate some more. It turns out this is not an isolated case, affecting young and old, couples and families. Canadians are $1.3 trillion dollars in debt (900 billion or 69% of that represents mortgages the remaining is consumer debt).

I place the blame on three aspects. First is the incredible availability of credit. Anyone can apply for credit in the form of a loan, a card, or line. We are pressed by banks, retail stores, and credit card companies to the tune of 200 million offers every year. Canadians possess 64.1 million MasterCard and Visa cards. This does not include the 24 million retail credit cards in the wallets of Canadians. We certainly do not have to earn much money to spend a lot more of it.

Secondly, our consumer society constantly reminds us that we need luxuries. We are exposed to hundreds of ads every day. We are told we must have that big screen plasma television, the most fashionable clothes, that new car, and modern home decor. The reason being? Such things apparently bring us happiness and reflect our social status.

Thirdly, is the lack of education and willpower. Most provinces have an area of study where students learn money management. The problem is that these courses are not mandatory. Ideally, financial affairs should be taught at home. Of course this only works if the parents are disciplined in their spending. People make too much money and mismanage it. Or they get married and no longer see the need to micromanage their finances as their combined income is substantial. When we don't pay attention to where our money goes, we can fall in financial dilemmas. Accompanying this is the absence of self-restraint. Buying on impulse, on emotion, on habit, or on want only adds to our monetary problems.