Would that some politicians opt to “spend more time with their families”.

One politician should. Since it’s clear she hasn’t a clue as to doing anything useful to help improve the financial situation of the 55% who feel it needs improving.

Government does not control personal finances! Persons do!Hence personal

I hope our fellow man believes that careful spending and saving are what will give them a better financial position. I would hate to think that man is more concerned about having money to spend is more important than spending time with family.

Sorry to disillusion you, cougs78, but government has a very great deal to do with the personal finances of all of us.

It can, and there’s a great deal of evidence to suggest that it does, (whether consciously or unwittingly), continually squeeze us between the two evils of ‘inflation’ and ‘taxation’.

The first has a detrimental effect on all ‘saving’, because in essence it is a pernicious tax on same ~ it reduces the purchasing power of every dollar the longer it’s ‘saved’.

And the second in no way does what most people imagine it does do ~ COMPLETELY pay for all the services we have deemed best be supplied through government.

One need only look at the continual growth of debt, which we might naturally expect to grow as the economy expands ~ but NOT at a rate that is exponentially EXCEEDING the rate of growth. Which it continues to, and at an ever accelerating pace.

Personal finances are a problem and consumer debt is a problem because people make the choice to live beyond their means. No other reason.

We have a modest income, are a single income family with three children who all participate in extra curricular activities and we have virtually no consumer debt and our house is 3.5 years from being paid off. Why? Because we bought our first home in 1999 for a reasonable price and rather than move in to something bigger, or fancier we chose to make this work. Because we both drive paid for late model vehicles (which we take care of) rather than 2 new cars that we make monthly payments on. When we buy a new TV we save for a few months instead of using a store credit card. On one modest income we still manage to take a tropical vacation as a family every year and multiple extended weekend getaways in the summer. Our children are well dressed as are we (spouse and myself)

Sure your 3500 square foot McMansion is beautiful but I will take mortgage free BEFORE 40 over 3500 square feet every day of the week

If we can live comfortably on less than 50k per year, anyone can. Start by taking a good look in the mirror.

How the heck can you improve your financial postion when taxes, cost of living, ultility, user fees, insurance on everything keep going up faster than the paycheck?

“Personal finances are a problem and consumer debt is a problem because people make the choice to live beyond their means. No other reason.”

===========================================
Admittedly there are some people who do not manage their personal finances well, and do ‘choose’ to live beyond their means.

Just as there are some businesses that do the same thing, and go bankrupt.

But there are also an ever increasing number of people who live on far, far, less than 50k per year. Working people, in most instances, making less than half that, and for them they now often have no ‘choice’ in the matter whatsoever.

No matter how carefully they manage their money it is simply not enough to live on in the manner our modern society dictates they will live, if they hope to remain somewhere in the mainstream of that society and not be shoved out of it, with slight chance , if any of ever returning.

Now take housing, for instance. The price of the ‘modest home’, if there be any such thing these days is considerably higher than it was in 1999. Have modest incomes needed to service a modest mortgage, even at today’s near record low interest rates, kept pace commensurately? Not hardly.

For if they have, then why is there now such a push towards building condos so many places, and a shrinking of lot sizes down to a postage stamp dimensions where new single family dwellings are built? Do people really want to live crammed in like sardines in a can nowadays?

Gone are the days when a would-be homeowner could buy a modestly priced, decent sized building lot and throw up a dwelling on it himself, finishing it off as he could pay for it from pay cheque to pay cheque, all the while living in it to keep his indebtedness to a minimum. ‘Society’ will not allow any such thing nowadays.

It insists the dwelling be finished to a stage it deems acceptable before an Occupancy Permit will be granted. And the initial cost of that dwelling will be far higher nowadays than in previous decades, since there are innumerable requirements under modern building codes that MUST be adhered to. And all of them are costly.

There is no argument that many of these things are beneficial, in the long run, to the homeowner. But in the short run they are one more thing that helps push him into having to “live beyond his means” to try to live at all.

Oftentimes now, amongst those who can swing it, a person buys a house not for the purpose of making it his home for the rest of his days, but as a means to try to profit from ‘inflation’. To try to sell it for more than he paid for it, and then hope he can repeat the process and thereby increase what he sees as his equity.

Equity he can’t build from his working income alone, because his savings under such a set up are continually diminishing in what the purchasing power each dollar of them will buy. But when his home’s value appreciates, so do the taxes that are levied on it. And all the costs of keeping it up also rise.

Is it any wonder so many opt to purchase the mini-mansion with all the amenities they can’t really afford? They realise there’s slight chance they’ll ever really OWN anything ~ the deck is stacked against them. So why not enjoy the USE of what’s being made available why they can? And if they’d only go broke paying a modest mortgage on a modest home, is it really any different to them than going broke paying on the mini-mansion? Either way they’re broke.

Great post, chey. Bravo! That is the difference between someone taking ownership and responsibility vs. someone who makes excuses and blames the government for everything.

Unfortunately, there’s too many people pointing their fingers elsewhere when they should be, as you say, ‘looking in the mirror’.

We’ll see how many people will be “blaming the government for everything” if/when the regime changes in May. My guess is there’ll be a noticeable absence of those willing to “take ownership and responsibility” for what will happen then amongst those currently preaching that.

I don’t buy it socredible.

We are a family of FIVE living COMFORTABLY on one income of under 50k per year, our three kids are all in activities and I didn’t mention before but we have planned for all three of them to have access to a fully paid university education (as long as they stay in PG). I am a stay at home mom with no college education. We made smart decisions ten years ago that still apply today to people purchasing homes or anything else. Yes modest homes can still be found at a reasonable price. No they won’t be show homes, but yes they will be livable, in safe neighbourhoods and may need a little hard work and elbow grease to update them, but they are out there. Your first home doesn’t have to be in Malaspina Ridge or University heights. Shoot for reality people.

Up until 3ish years ago we owned and paid full mortgages on two houses (we paid my mother in law’s mortgage as well as our own from 1996 when we bought it until 2009 when the house was paid for….15 year mortgage)

We paid 146 for our house in 1999…we live on acreage outside city limits. Our house inside city limits would still be valued at under 200k and there are a number of perfectly good houses in PG below 200k. They need a little elbow grease and some cosmetic updating, but they are all over the place. People are afraid of hard work these days.

I don’t see our tune changing in May. We have nothing that anyone can take from us. The only thing we owe anyone for is our home. If my husband lost his job tomorrow I could get a job at starbucks and pay the bills. I am not worried, never have been, never will be. We are the only ones responsible for the financial position of our family. There is nothing in this world that I want bad enough to owe someone money to have it.

Get acquainted with Dave Ramsey people, he will change your life. I will be far more proud to be mortgage free at 40 (something that is 100% attainable today for any 20 year old living in Prince George) than of having a 70k truck and living in a 500k house but being in debted to them until forever. Live like NO ONE ELSE, so you can LIVE like no one else. Smart choices today will pay off ten fold in 20 years.

I don’t buy it socredible.

We are a family of FIVE living COMFORTABLY on one income of under 50k per year, our three kids are all in activities and I didn’t mention before but we have planned for all three of them to have access to a fully paid university education (as long as they stay in PG). I am a stay at home mom with no college education. We made smart decisions ten years ago that still apply today to people purchasing homes or anything else. Yes modest homes can still be found at a reasonable price. No they won’t be show homes, but yes they will be livable, in safe neighbourhoods and may need a little hard work and elbow grease to update them, but they are out there. Your first home doesn’t have to be in Malaspina Ridge or University heights. Shoot for reality people.

Up until 3ish years ago we owned and paid full mortgages on two houses (we paid my mother in law’s mortgage as well as our own from 1996 when we bought it until 2009 when the house was paid for….15 year mortgage)

We paid 146 for our house in 1999…we live on acreage outside city limits. Our house inside city limits would still be valued at under 200k and there are a number of perfectly good houses in PG below 200k. They need a little elbow grease and some cosmetic updating, but they are all over the place. People are afraid of hard work these days.

I don’t see our tune changing in May. We have nothing that anyone can take from us. The only thing we owe anyone for is our home. If my husband lost his job tomorrow I could get a job at starbucks and pay the bills. I am not worried, never have been, never will be. We are the only ones responsible for the financial position of our family. There is nothing in this world that I want bad enough to owe someone money to have it.

Get acquainted with Dave Ramsey people, he will change your life. I will be far more proud to be mortgage free at 40 (something that is 100% attainable today for any 20 year old living in Prince George) than of having a 70k truck and living in a 500k house but being in debted to them until forever. Live like NO ONE ELSE, so you can LIVE like no one else. Smart choices today will pay off ten fold in 20 years.

Socredible: “We’ll see how many people will be “blaming the government for everything” if/when the regime changes in May. My guess is there’ll be a noticeable absence of those willing to “take ownership and responsibility”

There’s already a noticable absence of responsible people. What is going to change in May?

Chey, your posts are a refreshing change from the usual ‘poor me’ blather on here.

I don’t buy it socredible.

We are a family of FIVE living COMFORTABLY on one income of under 50k per year, our three kids are all in activities and I didn’t mention before but we have planned for all three of them to have access to a fully paid university education (as long as they stay in PG). I am a stay at home mom with no college education. We made smart decisions ten years ago that still apply today to people purchasing homes or anything else. Yes modest homes can still be found at a reasonable price. No they won’t be show homes, but yes they will be livable, in safe neighbourhoods and may need a little hard work and elbow grease to update them, but they are out there. Your first home doesn’t have to be in Malaspina Ridge or University heights. Shoot for reality people.

Up until 3ish years ago we owned and paid full mortgages on two houses (we paid my mother in law’s mortgage as well as our own from 1996 when we bought it until 2009 when the house was paid for….15 year mortgage)

We paid 146 for our house in 1999…we live on acreage outside city limits. Our house inside city limits would still be valued at under 200k and there are a number of perfectly good houses in PG below 200k. They need a little elbow grease and some cosmetic updating, but they are all over the place. People are afraid of hard work these days.

I don’t see our tune changing in May. We have nothing that anyone can take from us. The only thing we owe anyone for is our home. If my husband lost his job tomorrow I could get a job at starbucks and pay the bills. I am not worried, never have been, never will be. We are the only ones responsible for the financial position of our family. There is nothing in this world that I want bad enough to owe someone money to have it.

Get acquainted with Dave Ramsey people, he will change your life. I will be far more proud to be mortgage free at 40 (something that is 100% attainable today for any 20 year old living in Prince George) than of having a 70k truck and living in a 500k house but being in debted to them until forever. Live like NO ONE ELSE, so you can LIVE like no one else. Smart choices today will pay off ten fold in 20 years.

sheesh…sorry about the multiple posts. My computer is funny

Thanks JohhnyBelt :o)

I read O250 daily, but rarely comment but I really hate hate hate the woe is me attitude because your position in life is a result of the choices you make, and even when life goes sideways, you choose how to react.

I come from a modest upbringing, my father is an east german WWII refugee who came to Canada in the 1950s (with absolutely nothing) and my husband grew up in PG but literally comes from nothing, like the poorest of the poor and has been looking after himself since he was a young teen. Everything we have is the result of our own blood sweat and tears. We are both aware of the value of a penny saved.

“sheesh…sorry about the multiple posts. My computer is funny”

Your computer isn’t funny. This site hates it when you hit the ‘refresh’ button on your browser after you’ve posted. Avoid the refresh button and you’ll be fine.

Chey, there is no doubt many people make foolish choices financially and spend far more than they should on things they don’t need.

And I do not particularly have any sympathy for them when they get themselves into a spot where their living “high on the hog” can’t be sustained any longer, and they then cry poor.

Nor do I have any sympathy for those who purposefully set out to “milk the system” by all the numerous ways many who have no intentions of ever doing anything other than that currently utilize.

I have never done that myself, and have always been quite careful in my spending habits and conscious of keeping any necessary indebtedness to a minimum, and paying it off as quickly as possible.

My wife and I saved up half the price of our first (and present) home, which was, and is, modest by anyone’s standards, and paid off the mortgage for the balance in four years. We put every spare dime into ridding ourselves of it as quickly as possible, since interest rates then were in the double digits.

We’ve saved what we needed to purchase any new vehicles we’ve bought, and never financed them. And drove them for a long time. We’ve done that on one income since our kids were born, a little over twenty years ago now, and that income was never close to $ 50K a year.

I have my own business, and in lean years, and there’ve been more than a few in the over 40 years I’ve been in it, I dipped into savings that were hard won several times to keep afloat, rather than incur debt. (Which might have been hard for me to do at that point anyways.)

So what you say can be done, certainly can be done with determination and more than a little luck.

But it isn’t getting easier.

When we purchased our house we paid just under $70,000 for it. It is currently assessed at $ 280,000, and it would probably sell at around that price. About 4 times what we paid for it 23 or 24 years ago.

My income, and the income of my employees has increased somewhat over that period. But not by 4 times what it was then. For them it has about doubled in that period. For me, it can vary, but not more than that either. I’m past retirement age now and get two very modest pensions, so that doesn’t matter. We can get by.

My employees are paid well in comparison to what many other people who work in similar jobs are getting, but still under what other unionised employees working elsewhere would get. They’re not complaining, they’d not do as well most places elsewhere, and know we pay the best we can.

For people in their income range, buying a home today is perhaps still possible ~ but they won’t be paying its mortgage off early. These are not people who are not hard working ~ many of them work very hard, full time, and they earn an income midway between minimum wage and union scale. The businesses they work for simply could not afford to pay them any more and still stay in business.

And they’re going behind with every rise in the cost of living and every increase in taxation. And we have a government that continues to induce both. Its likely successor, come May, will continue to do the same.

The point is, while it is certainly wise from an individualistic standpoint to manage one’s money as prudently as possible, if EVERYONE did just that, if no one ever “lived beyond their means”, (financially speaking, that is, because it is a physical impossibility for anyone to actually ever ‘live beyond one’s means’ ~ to do that one would have to ‘consume’ something which has not yet been ‘produced’, and no one can do that), the present economy would melt down into a full scale depression that would easily rival the unemployment levels of the 1930’s, or even exceed them.

That’s the unfortunate truth of how the current financial system functions today. Beyond that individualistic sense, looking at society as a whole, there is no other way currently to keep any modern economy going without a continual pile up of unrepayable debt. The ‘profligate spenders’ provide a very convenient smokescreen to mask this truth. It shouldn’t be that way, but it is. And it’s going to cause enormous problems for the prudent and spendthrift alike, and I wouldn’t want to guess which will lose most.

ahh, the refresh button, that is it. Now I know.

See socredible….you get it. If you’ve followed Dave Ramsey, or if you’ve ever read David Chilton’s The Wealthy Barber (best wedding gift ever by the way, I now give it with every wedding gift I give), you know that there was once a time when in Canada it was frowned upon if you had a mortgage in your 50s….Dave Ramsey still says it is a unique quality that Canadians possess.

Sadly it is fading away as people look at the monthly payment vs the whole amount. They see that they can afford the payment if they take out a 30 year (wth is up with that anyway….a 30 year mortgage….why….I think I heard the mortgage changes of 2012 actually did away with 30 year amortization didn’t they?) The next generation will probably be the first generation that will have more lifetime renters in it than home owners

in all of this “we” are raising children who put no value in actually OWNING the item, only in being able to afford to buy the item.

We do live beyond our means and we do consume what isn’t yet available. Every time a person goes out an finances a 60″ TV or a set of furniture they are consuming money that hasn’t yet been produced by them, thus are living beyond their means.

A CBC news article in November states that consumer debt is growing at a rate 400 percent faster than inflation and that average Canadian consumer debt is sitting at over $25k or 163% of one’s disposable income. I hate the word average though, because it means that half have less than 25k in consumer debt and half have more than 25k with nothing to show (or something that depreciates in value) for it is mind boggling to me.

I don’t see how the spendthrift will lose. They may have to make adjustments….a single income family may have to become dual, but when you don’t owe anyone money, no one can take anything away. If the Canadian economy collapses the way the American did a few years back the only thing I will have to worry about is paying the mortgage, which I can easily cut back on (if this crisis happens within the next couple years) since we make a 2 or 3 times the min payment with every bi-weekly payment, pay the hydro, the gas, car insurance, car gas and food. Everything else is optional.

Plus, the work is out there. You might have to relocate, travel, whatever, but the work is there for the taking.Most of those “up north” jobs pay well enough to make the commute worth it. Sure it sucks having one family member away for work (we are doing this right now) but if it’s for the greater good? We love Prince George but my husband is changing fields and the work in his chosen field just isn’t available regularly in PG, so the choice is to continue in a field he has been in for nearly thirty years and HATES and is physically getting too old for, or he is gone for extended periods but doing a job he loves.

There is work (good paying work) available for anyone who wants to WORK. What is really tragic is when you go to Alberta and listen to people complain about the immigrants working the fast food jobs, complaining that they are taking jobs away from locals. Sad thing is that our younger generation thinks they are too good to work those kinds of jobs. They would rather not work at all than work at Tim Hortons.

I don’t know what the answer is, but I do know that looking inwards is a good place to start. *shrug*

Another good place to start is to buy local and support local small business. I am happy to pay a little more for something at a local small privately owned business than for the same item at a large chain store. I become more and more aware of the importance of supporting local with every year that passes.

Socred: “When we purchased our house we paid just under $70,000 for it. It is currently assessed at $ 280,000, and it would probably sell at around that price. About 4 times what we paid for it 23 or 24 years ago.

My income, and the income of my employees has increased somewhat over that period. But not by 4 times what it was then. For them it has about doubled in that period.”

You make some interesting points. Despite the increase in the cost of housing, people still bought (and continue to buy) houses at the going rate. Why? Partially to ‘keep up with the Joneses’ and partially because banks and lending institions made it too easy to take on a mortgage people ultimately couldn’t afford.

“We do live beyond our means and we do consume what isn’t yet available. Every time a person goes out an finances a 60″ TV or a set of furniture they are consuming money that hasn’t yet been produced by them, thus are living beyond their means.”
===========================================

No, Chey, no one ‘consumes’ money, anymore than anyone, other than the Banks, the Mint, or a counterfeiter ‘produces’ it.

We can no more ‘physically’ consume any actual goods before they are produced than we could drive a 2014 Chevrolet right now, before the factory starts to make them.

What the rest of us produce and consume are goods and services PRICED in money. There is nothing at present that ties the totality of money itself available in the hands of the public to the totality of prices of all those goods that this money is supposed to be able to FULLY liquidate, as this flow of ‘production’ becomes ‘consumption’.

We can only GET money from someone else who has some. And originally this money will be found to have all emanated from one of those three sources.

That’s partially true, Johnny. People continue to buy houses primarily because they need somewhere to live. And for many there is a greater attraction in trying to make a mortgage payment than paying rent that might be just as much. If suitable rentals are even available.

They may be anticipating further increases in house prices, and even though they’re stretching themselves to buy now, their situation might be worse later. It’s a reasonable assumption, considering recent history. They are often stretched to the limit when they buy ~ a contractor customer of mine who builds a large number of ‘modest’spec homes, told me recently that a mere 2% increase in interest rates would trigger a wave of foreclosures.

In a larger, macro-economic sense, the new home mortgage is still the principal vehicle for necessary infusions of new credit to enter the economy. It’s why an upturn in housing always leads a country out of recession.

Today, so-called ‘consumer credit’ debt, mostly mortgages, dwarfs both government and business debt. That’s increasingly been the case since the end of World War Two in both the USA and Canada. Prior to the war the level of home ownership in both countries was far smaller, and a far greater number of people rented. Many manufacturers had their own company towns, where company owned housing was available at modest rents as an attraction to retain a workforce. They’ve virtually disappeared in that form now.

The problem with the sub-prime mortgages was that the USA, with continual outsourcing of jobs to lower waged countries, is running out of a pool of people who’d normally qualify for a mortgage.

They may be working, but their employment now doesn’t earn them the income level anymore they should have to have to qualify. So the States got caught between a rock and a hard place financially.

Without new credit continually entering the economy, existing credit in the form of already issued loans can’t be fully amortised. When the rate of amortisations falls, the banks stop lending. They’re not going to throw good money after bad. Without that continuance of available credit, the economy contracts, and defaults pile up.

The fundamental problem is that the modern industrial economy is not fully financially ‘self-liquidating’. With outsourcing and the advent of technology there is ongoing labor displacement. And more importantly, labor INCOME displacement. Even if those displaced find new jobs, the ‘costs’ of production that enter prices in their old jobs are now ALLOCATED charges, for things like depreciation, etc. and distribute no incomes that can then liquidate the costs of production through prices as that production flows through into consumer markets. Increases in debt have to try to bridge the gap ~ while they can. And when they can’t…., well, you know the rest of it.

The ways they’re trying to obviate this have all been tried before. And failed. Austerity won’t work, nor will increased deficit spending by governemnts. A good war might help, but then again it might not. Social Credit proposed a solution in the last great depression, and it was almost tried in pre-oil Alberta. A part of it, the Alberta Treasury Branches, now ATB Financial survives to this day.

But Alberta, at that time, wasn’t an ‘industrial economy’, nor even potentially internally self-sufficient, and its government made some early errors that weakened their already limited provincial control over ‘credit’ under the constitution, the BNA Act of 1867 .

The Social Credit proposals elsewhere were passed over in favour of Keynesian economics, which held sway til the 1980’s and the need to reign in the ever more rapidly increasing inflation they induced. The original Social Credit proposals should be looked at again, the solution is likely going to be found there.