May 25, 2024


There are needs and there are wants. And then there’s that new 80-inch LED TV.

According to recent reports, consumer debt in Canada has reached an all-time high.

On average, each of us is $27,485 in the hole – and that doesn’t include our portion of the $6 billion federal debt ($17,367 each, and rising by the second). That is a six per cent increase over last year and marks the first time the figure has cracked $27,000.

More concerning than the numbers, however, is the public reaction.

First, there’s the people who are flat-out apathetic.

They see debt as a necessary and unavoidable evil and credit cards as a licence to spend money they don’t have. They buy what they want, when they want it, and are content making minimum payments while the interest piles up.

But that type of thinking is short-sighted and irresponsible. It is exactly the type of thinking that got us in this credit crisis to begin with.

Then there are the people who point fingers.

They blame the government, the greedy corporations who produce and distribute their goods, advertisers and lenders.

Granted, the cost of living is going up. Yes, marketing is more prevalent and pushy than ever before. And yes, banks and credit card companies are more than happy to hand out high-interest loans to people who can’t afford to pay them back.

But at the end of the day, we are each responsible for our own finances.

According to the reports, the majority of our debt comes from auto loans and instalment loan borrower debt – a technical term for big-ticket items like furniture and renovations bought on credit.

So while prices may be going up while wages remain seemingly frozen, it’s not like we’re burying ourselves in debt trying to make ends meet.

We’re buying things we really don’t need with money we don’t really have.

And it’s not just the big things. I can’t count how many times I’ve heard fellow students complain about debt between sips of a $5 coffee from Starbucks or after another night out, their fourth of the week.

The truth is, whether we earn $20,000 a year or $200,000 a year, we want a lifestyle which requires just that little bit more. We equate success, and happiness, with material possessions and we compare our lives to others based on belongings.

We want what our parents have – and we want it now.

There was a time not too long ago when the golden rule of personal finances was to not spend more than you make.

Especially on one TV.