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| Scare tactics are effective on the elderly |
One of the
most remarkable things about writing a financial blog is how open people become
when talking to me about their own financial struggles. Listening to other
people’s challenges and successes gives me a lot of reassurance as well as tons
of hope that I can continue to get ahead with this process. A common theme in
the discussions I have with people who still carry debt is that most don’t have
any idea how they can get their debt paid off. Fortunately I have tons of ideas
to help them out. The part that usually baffles me though is how long people
are willing to wait to pay off their debt in full.
For
example, when I look at my current “repayment plan” for my student loans, my
lender projects that I still have another 89 months (7 years and 5 months) of
minimum payments to go before I will pay this off entirely. Not only that, the
amount of interest I will end up paying is $1,837.78. I hate dumping any of my
hard earned money onto interest payments so when I hear about people being
comfortable with paying off a small amount of debt over such a long amount of
time, I want to smack them over the head and tell them to wake up. I get it, we
all feel entitled to the best of the best, and since we work hard, we should be
rewarded. The problem is that if you keep resorting to credit to buy everything
you want, you could end up with nothing when the debt gets quickly out of
control.
If you were
like I was, teetering on the brink of financial disaster, you need to stop and
take control of your situation before it gets unmanageable. There are some
major signs that you should be weary of such as: not being able to make more
than the minimum payments on your bills; not knowing how much debt you have;
living paycheck to paycheck; having no savings; creditors constantly call you
for payments; you remortgage your house every other year; and the list goes on.
I recently read an article (I’m sorry I can’t remember where) where most
financial advisors said they wished that people would have come and seen them
sooner to deal with their finances rather than later because most of the time,
they are too far gone to be helped and they have to file for bankruptcy. This
couldn’t be any truer. If you are like I was with my money, look for something
that will motivate or inspire you to get your debt repaid. For me, I can think
of a lot of things I would rather do with $1,800 other than use it for interest
(like a mini vacation), and not to mention how less stressed I get as the debt
numbers go down. Debt repayment is work, but when you build a strong support
system like I have, it is completely possible to do.
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| Canada's Debt Clock! |
Ok, so you
may be wondering what is with the scare tactics/pep talk? In one of the
conversations I had recently with someone who I don’t even really know, she
told me about Canada Canada Canada
But what
can we do to reduce this number, right? We can’t be responsible for other
people’s neglectful spending, but we can certainly do our part to encourage
others to start spending money smarter, especially over the holidays. In a
country where we buy everything we want on credit, I find it surprising that
people have anything left to buy for each other at Christmas that they don’t
already have! Just like last year, I want to emphasize that there are so many
ways that you can save money this year during the holidays.
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| Make a shopping list like Santa!! |
When you
are out shopping, be like Santa and make a list. Making a list when you shop
will help keep you on track with what you want to buy for your loved ones. Try
to keep the list as specific as possible, and write down the items that you
want to buy even for the stores where you know what you want to buy and put a
price limit on how much you want to spend. If you want to go the extra mile,
look for deals online for items that you want to buy and save yourself even
more money (as long as the shipping isn’t ridiculous). If you can stick to a
list, you will have an easier time staying on budget.
Leave the
credit card at home. This is a general rule for me everyday, but it’s even
better to put into practice during the holidays. You shouldn’t have to go into
debt just to buy everyone you know a gift, and nor should they. Don’t ever feel
bad about giving a friend a card or simply asking your family to do a gift
exchange instead of buying each of them a gift. And if you’re doing a gift
exchange with friends, think doing what my friend Gigi does and have everyone
re-gift something that they don’t use! This idea is not only a great way to
recycle, but it is also a hilarious way to spend time with your friends during
the holidays!
Be
thoughtful with your gift giving. Can you think back to 5 Christmases ago and
remember everything you got? Even better, can you remember all the things that
you bought for your loved ones? I find that the gifts I remember the most are
the ones that were made by someone. I
remember one year when my brother blew up a picture of us as kids working with
my Dad. He was so moved by that photo, which it really made the whole day a
wonderful and memorable experience for us all (and no, it wasn’t even Christmas
day). I can’t tell you what I got for the past few years other than maybe some
money but I don’t even remember the amounts. What I do remember are the fun
times that I had with my family which I guess is why I go back home year after
year.
The
holidays can be the most stressful time of the year, or they can be the most
exciting and memorable. With the debt counter climbing higher, take time to
stop and think of ways that you can contribute to reducing your debt instead of
augmenting it this season. The holidays will become less stressful if you plan
ahead and use your own money, not the banks’. If you’re reading this and
thinking, “well $hit John, it’s too late now”, then perhaps you should make it
your new year’s resolution to put $25 a week into a special “Christmas Savings”
account and by this time next year, you will have $1,200 to spend ‘til your
heart’s content.
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