Recent news about Canadians taking longer these days to pay down personal debt has got me thinking about my own debt situation right now, and about how I’ve handled debt in the past.
Debt and I get along well, which ought to be reassuring to others in light of the fact that I’m CEO of Canada’s largest credit counselling agency. Debt is a simple matter for me. I have a mortgage that I am dutifully paying down at an accelerated rate, and I have a credit card that I pay off in full each month. I’ve never lapsed on debt payments because I strictly adhere to a written personal monthly budget premised on my spending habits.
I’d like to be able to claim that personal money management has always been an easy-going process for me, but like you, dear reader, I am only human. Surely you’ve heard the expression, no pain no gain. Well, in matters of money, the expression applies equally to all of us in one way or another.
Over the years I have made many sacrifices to keep my fiscal affairs in order. That has made me a frugal soul, and perhaps – if my two teenage kids were to offer their opinions – a bit of stern taskmaster in matters of controlling personal spending. Depending on the perspective, you could call me a tightwad or simply thrifty.
My family does not dine out often, and we rarely order in food (I cook most of the time). We do not regularly travel the world to exotic locations. I do not own a luxury automobile. Our closets and bedrooms are not chock full of wildly expensive designer clothes and the latest electronic gadgets. Status symbols do not weigh heavily on our decision-making. But we are generally a happy lot. As a mom, I sleep well at night knowing that my home is secure and that my kids are well looked after. I also feel blessed to be living in a country that comparatively speaking is so materially and culturally rich.
My comfort level in life was not always so high. Being the child of two very fiscally conservative parents, I felt somewhat deprived as a kid. I mean, I didn’t want for life’s necessities, but I was a hand-me-down sibling thanks to my only sister being just one year older than me. Her clothes became my clothes, and my clothes became a major sore point for me. As a result, in later years, buying clothes became my financial Achilles’ Heel.
Later, I came to reflect upon how deeply one’s early emotional experiences affect one’s treatment of money. But at the same time, I came to see that my parents’ conservatism provided me with strength of purpose, particularly in relation to money.
I needed that strength as time went on. My university years became a true financial test by fire. I lived hand to mouth then. In fact, I remember having literally a dollar at times in between getting paid for my part time job.
As a young woman, I learned some important financial lessons, one having to do with my sister, who always seemed to be broke. She borrowed my little junk heap car one time, smashed it up, then never paid me back for the trouble. Another lesson came when I got my first credit card just prior to the Christmas season. I went on a spending spree for a truckload of gifts that inevitably lead to a guilt-ridden New Year when the credit card bill came due.
Today, I have to admit there are times when I get a sky-high urge to spend, but reality seems to conspire to always bring me back to earth. I mean to say, who needs to wantonly overspend these days when spending more than you anticipated presents itself as a matter of necessity? This came home to me not so long ago when I took my kids on vacation to Myrtle Beach, South Carolina. It became a holiday in hell, what with the freezing weather and expenses that I did not see coming (at one point I thought I’d have to buy parkas for all us before we could visit the beach).
All told, though, my kids and I are on firm financial ground, and the future looks bright. Not so long from now, I will pay my mortgage off earlier than expected, and that only means greater financial security, which leaves me with a very good feeling indeed.
That brings me back to the matter I first mentioned regarding how Canadians are taking longer these days to pay down their personal debt. Why we as a population feel the need to pull back on our debt payments wasn’t entirely clear in a news report citing a recent survey. It noted that for 2013 monthly debt repayments on average have fallen by 13 per cent from $1,138 to $986 among the more than 1,000 Canadians in the survey sample.
Now, maybe Canadians are reducing their monthly debt payments due to financial problems, or maybe they are doing so to free up more cash month to month for discretionary “fun money.” If the former is the case, then perhaps more people should be contacting us here at Credit Canada for some qualified credit counselling. If the latter is the case, let me say this: As both a parent and a financial counsellor, I would urge my fellow citizens to take the expression “no pain no gain” to heart.
It all comes back to what I tell people time and time again. Be vigilant – even mercenary – about sticking to a written monthly budget that offers the swiftest possible course to debt-free horizons. Sacrifices may have to be made to achieve this end. Close analysis of your personal spending habits maybe required to trim expenses and bolster paying off personal debt. But in the long run the effort is well worth it.
Take it from someone who’s been there.