Being raised as a navy brat I remember money was always extremely tight in our house. Mom would do whatever she could to make ends meet, all while raising four kids on dad’s meagre salary. We never went to restaurants, wore hand-me-down clothes and had no television set in the house; worst of all, us three boys had to endure the embarrassment of “Do It Yourself” haircuts, mom’s “super styling masterpieces” that usually left crooked bangs from when the salad bowl would slip on our noggins! So yeah, money WAS tight at our place; but we were always kept warm, were well fed, and had a roof over our heads; so besides not having a few creature comforts, all around life was pretty good, and us kids turned out okay in the end.

Thinking back now, it reminds me of one other “thing” my family didn’t have back then – something that today, most Canadians are so accustomed to having, they couldn’t imagine life without it. In fact, most people make sure they have lots and lots of this particular “thing”, and are continually adding to it with reckless abandon! And just when they think they’ve got “too much” of it, something new catches their eye and – being unable to resist it – they’ll go out and get some more of this “thing”; and on and on the cycle goes. But here’s my point: It’s also the one”thing” is the one thing that my parents absolutely refused to have, and did whatever they could to avoid doing so! What, you may wonder, is this “thing” I’m been going on about? It’s debt; more specifically, consumer debt. And if you’re not careful, it can swallow you up whole and destroy your future.
It seems most people have no clue of the toll that racking up the consumer debt will eventually take on their lives – they just spend, spend, spend, with no thought of how they will pay for whatever it is they are buying. In my parent’s day this behaviour was unthinkable; if we couldn’t afford something we didn’t buy it, end of story. But then again, times have really changed, and my fear is that most people don’t realize how much they are truly giving up (I’m not talking about just $$$ here) by constantly spending what they don’t have. I believe that if most people took a moment to really think and understand the effects of having long term debt will have on their lives, it would scare the living hell out of them!
And just in case you think you might be one of them, in this post, I’ll try and highlight a few of the dangers, and offer some solutions that can help you get back on track, okay? Perfect!
Long Term Consumer Debt = Lack of Choices & Freedom

Here’s the sad truth: As a nation, we are so used to having thousands of dollars of consumer debt (on multiple credit cards, car loans or lease payments, outstanding student loans that need to be paid back, loans to family members, etc.) that for many people, the very idea of actually paying it off is rarely considered, or seen as a goal to be achieved. These are usually the same people who groan that they are on the “Freedom 85” Plan, or that they “can’t afford” to go to a dentist – you know, right before settling into their Lazy Boy Chairs to watch one of the 200 channels on their recently financed 84″ high definition flat screen televisions, and tucking into the extra-large pizza they just had delivered to their house!
I think you get my point: These “I need More-More-More” and “Buy now, pay whenever” mindsets have become the norm amongst many people, and it makes me fearful for them; because by constantly making minimum payments on “stuff” they don’t need (and can’t afford) is what keeps good people stuck; stuck in jobs they don’t want to be in, and stuck in situations that keep them from having/doing the things in life they really want. The problem is by the time they finally realize this, the average Canadian owes a fortune (plus a high interest rates) and risks losing what little they have if they don’t make more than just the meagre payments required to help them limp through another month. It’s around this time that they finally get it, and decide it’s time to make a change; the problem is, it’s often too late. By this time the only choice left is what to have for dinner… Alpo or Pedigree?
So, how serious is the Personal Consumer Debt crisis? I’d say it’s an epidemic! According to a recent article in The Globe and Mail, (Nov 2013) the average Canadian consumer debt (excluding mortgages) is at $27,355 – per person; another statistic has noted that when it comes to disposable income, Canadians have hit a record high spending $1.64 for every dollar they earn. What does this mean for you and me? If we have little or no consumer debt, probably nothing; but if we are trying to manage any combination of the debts listed above, it probably means two things: First, that if we ever want to live the lifestyle we truly dream of (A life of things as financial security, world travel, freedom from shitty jobs, etc.) we need to get our financial houses in order, and make a plan to do so asap; and secondly, unless we want to spend our “Golden Years” living in tiny rented apartments, eating dog food, cereal and creamed corn we’d best begin to take our debt situations seriously and pay them off pronto!
If you are wondering if you have too much (non-mortgage) debt, (How much is too much? Personally, I think zero is a great number) I’d recommend you ask yourself the following questions; the answers will quickly let know where you stand:
- If I lost my job, could I afford my current lifestyle?
- Do I save money for retirement every month? If I don’t, do I ever struggle with not having enough money?
- How would I pay off my debt with no income coming in? What would I have to give up?
- Do I like my job? Is it what I really want to be doing at this time in my life?
- How much (non-equity) money do I have saved? How long would that last me if I wasn’t working?
- If I could take a month off, and money wasn’t an issue for me, what would I do?
- Do I want to live in fear of debt for the rest of my life? Doing what I’m doing now, is it possible I might?
- If so, what can I do about it, beginning today?
If any of these questions leaves you feeling uncomfortable or even fearful for your future, that’s great – it means you recognize this as a problem that needs your attention. And trust me when I say, I get it; in my late 30’s when my wife abruptly left, I found myself penniless, with several debts and other unexpected expenses that needed my immediate attention for me to stay afloat financially. I employed every frugal trick learned from my upbringing, (Thanks Mom!) studied books on how to get ahead financially, and cut every corner I could. It took some time, but eventually I was able to stabilize my situation, and then build from there so as to eventually be able to afford to do and have the things I wanted. Yes, it was hard work, and required a lot of commitment and sacrifice; it meant learning to live within my (newly defined) means, to get to where I needed to, but in the end it has been worth it.
Today, other than a small mortgage I’ve been (consumer) debt free for almost 15 years, and (for the past 11 with Paula) we are working at eliminating our mortgage debt within 2 years. I can’t wait for the feeling of total freedom this final step will bring us! And it’s that sense of freedom, of being in control, of having choices, of not putting up with other peoples bullshit because you “need the money” etc. that I want for us, and for you too. This is why I put it out there that if personal consumer debt is something you are concerned with in your own life, here are some resources that can help you.
Thanks for listening to my rant; this is a really important topic that I’m passionate about, and feel no-one should ignore if they truly want to find success and happiness in life. Wherever you find yourself in your own personal financial journey, it never hurts to get a bit more information; so to finish off, here’s some good money management / personal development books I highly recommend, as each one was instrumental in helping me find my own way. I hope you check them out. Cheers and thanks~!
The Millionaire Next Door by Thomas Stanley
Secrets of The Millionaire Mind by T. Harv Eker
Your Money or Your Life by Joe Dominguez
Anything written by Gail Vaz-oxlade!
Need a little motivation and inspiration to get you started? Check out these gems!
Seeds of Greatness by Dr. Denis Waitley
The Magic of Thinking Big by David Schwartz
Awaken the Giant Within by Tony Robbins
Readers: What do you recommend as a way to crush debt? What worked for you; what didn’t? How did paying down debt change your life? Please let us know in the comments below!
Love this article! It’s interesting to see what the average Canadian carries as debt load – I am thankful for learning early on from my parents that if you can’t afford it, don’t buy it! Although it took me years to really learn about saving and I had to have some challenges / experiences, now I am living my dream and have the freedom to make choices for myself.
Thanks David!
Thanks Erin! Glad you enjoyed the post – and don’t worry about having made a few financial errors along the way, we all have – despite what our parents taught us – the key is to learn from them and move on, which I certainly KNOW you have done!
Congratulations on your exciting move – you will do amazingly well at it… this I know for sure! Drop me a line if I can be of any help! Onward and Upward!
Cheers, David (Fisherman)
Awesome read Fish! My parents did a great job of installing a fear of debt into me, I think that will be a common theme of many of the people that are aware of their finances. One of the financial understanding pieces I did was actually reading the mortgage agreement from start to finish and annoying my mortgage lady to no end with questions about it.
I talked to a few people about mortgage calculators and often the way people play with them is opposite to the way I use them; some people I know enter how much they can afford to pay, add the years they want to be broke for, accept the mortgage rate and press calculate….. and presto! You can see how much you can afford to go in the hole.
I prefer to start with the number I want to spend, work with the competitive intrest rates, and then tinker with the amortization length. It’s crazy how shortening pay back by 5 years really costs, try calculating your mortgage over 25 years and then over 20 with the same terms…… its really not that much.
With my current mortgage I paid $2,800 penalty to renogtiate which sucked, that was 3 years ago. If you look at where I would have been compared to where I am, I covered the $2,800 and am now almost $3,500 ahead of where I would have been in the old mortgage, and am expecting to be over $7,000 ahead when the mortgage comes up for renegotiating.
If I can give one piece of advice when signing a mortgage, it would be to ask for two amortization schedules; one with a fixed term vs variable.
Amen to that Damien! I too, paid a penalty a few years ago, about $9,000! However, that took my rate down over 2 points, and with the balance I was carrying at the time really helped out in the long run.
You are right – it seems to be a common theme that those of us who are aware, probably learned our financial habits from our parents – understanding this, I guess I can forgive my mom for the haircuts after all! Cheers~! Fish
Great post, David! Damien I really liked your take on mortgages, did you use an online mortgage calculator during your process like: http://www.zillow.com/mortgage-calculator/?
Hey Andy,
Thanks for stopping by the blog, and checking it out – I’m glad you like the posts! For this I didn’t use so much of a mortgage calculator (although they are good) but more so my obsession of checking my mortgage balance and projected payment status every couple of weeks. Whenever we had a bit extra we put it on and then checked out the updated totals. I couldn’t believe how fast they began to melt away when we did this, and the mortgage company’s spreadsheet showed us exactly how much was principle, and how much was interest.
Also, every Jan I would put a snapshot of “Where we were at then” on my goals board, and hand write in the predetermined date we’d hit another milestone. Keeping this in front of us keeps us very motivated to stick to the plan! Thanks again for the question!