Greatest Hits of 2017: The Debt Dilemma – Our Generation’s War - Budget Boss Greatest Hits of 2017: The Debt Dilemma – Our Generation’s War - Budget Boss

Monday, December 18, 2017 (Originally Posted: Saturday, March 18, 2017)

The Debt Dilemma – Our Generation’s War

This morning as I watched BNN as per my daily routine I saw some troubling news. Total Consumer Debt levels rose in the last quarter of 2016. Merry Christmas to us all! I’m sure that is what Jesus wanted! It rose 6% up to a shocking 1.718 trillion.That’s trillion with a capital “T”. Here in Ontario, the debt level per person (excluding mortgages) is $21,948. Today I am going to talk about debt a little bit and offer up some solutions.

This topic always gets me going. I have felt the pain of debt. I have gotten the calls from creditors. I have had screaming matches with VISA reps over the phone. I have even had the locks changed too. I went through debt hell for a long time and then decided that’s enough. At the time I knew what I was doing wasn’t working. Not only was my life not getting better, but it was getting dramatically worse. It took some soul-searching and sacrifice to climb out of a 50k hole. I essentially disappeared for 5 years. I came out on the other end with no debt and 50k in savings. It wasn’t easy working 55-60 hours a week. It also was tough missing parties with friends. Not buying a single thing for myself during those 5 years was part of the pain. No pain no gain right?

I think the debt problem Canadian’s have is systemic. We have become part of a culture where having debt is in fashion. Go back 50 years and debt was shameful. Things were also way cheaper back then. I remember my mom filling a shopping cart up for $80 when I was a kid. That gets you 2 bags of groceries these days. This generation is also starting their adult lives with absurd amounts of debt from student loans. The deck seems stacked against us. The irony of this situation is that we have insane amounts of information at our fingertips. We are the most educated and technologically advanced society in the world’s history. So what do we do? I have some tips that can hopefully help you out of this nastiness.

1) Mentality is Key

Like quitting smoking or getting in shape you have to be in the right mentality to do it. Optimism is essential. Be happy you have addressed the problem. Open up to a friend or family member and don’t get down on yourself. The worst decisions I ever made with my money was when I was sad about having no money. Ironic isn’t it?

2) Minimize your Life

Anything that is costing you in life (including people) has to go. If it isn’t essential it’s gone. This includes gym memberships, Starbucks, loser boyfriends, high cable bills, expensive nights out, booze, gas guzzling cars, shopping sprees, vacations, smoking (of any kind), pricey salon trips and silly expensive holidays (sorry Christmas, you gone). Get back to the basics and live minimally while you attack your debt. Let’s be honest, have you earned this life of luxury if you are in debt? That brings me to the next point.

Wasteful Consumerism (7 Must Go’s) – Budget Boss

3) Attack the Debt, NOW

Don’t wait. Stop making excuses. Do it now. I hear from so many friends how nonchalant they are about debts. “Oh, I can pay that off whenever. It’s no big deal.”If you can pay it off whenever then why don’t you? Do you like having it hang over your head? Do you like not being able to get a loan for a car or a house because you owe on your credit card? Of course not! I know I didn’t enjoy banks turning me down. They don’t lend money to risky borrowers. Risky borrowers are people who are already servicing a high debt load. Reduce that load now. Talk to a friend, family member or even better an expert about what you can do to get out of debt. Make a plan and stick to it. You will thank yourself later believe me. 

Debt

4) Create an Emergency Fund

You got into debt by not having the money to buy the things you want and need. An easy solution to that problem is to have the money next time. This is where an emergency fund comes into play. This is money easily accessible in case something comes up. I borrow from myself, not the bank or VISA. That doesn’t mean I don’t have credit cards or a Line of Credit. What it means is that I don’t use them for that purpose. I keep my money strictly segregated. They don’t touch each other. Think of it like those 2 friends you have that don’t like each other. Just don’t invite them both to the party. It’s that simple. Get started on an emergency fund now. Experts say 3-6 months living expenses is enough. Aim for the latter. 

Starting an Emergency Fund – My 5 Step Process – Budget Boss

5) Respect Yourself

Honestly, think about what is best for you and go for it. Respect your credit score. Make sure you pay bills on time and try to eliminate that debt. Doing so will make you more attractive to lenders. You will also be happier believe me! Also be cautious of predatory lenders. Anytime someone throws money at you have to ask yourself why. We all like free money but sadly there is no such thing as a free lunch. Often times these loans have terms that you might not like. It is usually buried in the fine print. Make sure you know what it all entails before you sign on the dotted line. You have to remember they make money by taking yours, so don’t let them.

 

Thanks for reading my post about debt. I’m going to end it on this note. This generation is coming to realize that the deck’s stacked against us. The system’s designed for us to fail. It is an uphill battle. Despite this, we do have a few things going for us. We know the conditions in which we exist. We also are the most educated generation ever. So if we are smart enough to know what is hurting us and are highly educated we have no excuse. We are not ignorant and we are not hopeless. If we do fail we have no one to blame but ourselves. We have the intelligence and we have the technology. Let’s reshuffle the deck and flip the system in our favor. I don’t know who first said: “If you are not in debt, you’re not living.” If you find out point him out to me, I get first shot!

Thank you for reading my post today as Greatest Hits of 2017 Week begins at Budget Boss. Tune in tomorrow as we go through another one of my most popular post of this year. If you have any questions about debt please don’t hesitate to contact me at joe@budgetboss.ca. Have a great day friends!

“There are no shortcuts when it comes to getting out of debt.” – Dave Ramsey

Debt

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Email – joe@budgetboss.ca 

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