Last nights news contained not one but three references to the Canadian government hiking interest rates in the days to come. The bigger part of the news is why they are doing this. Guess what?! The central bank is alarmed over the record high household debt to income ratio, and said that for the first time ever that personal debt would play a key role in monetary policy decisions.
We are spending way more than we are making and not just by a little bit. As of right now, the average Canadian is spending $1.63 to every dollar made. Multiply that by how many Canadians we have and that is a whole lot of debt. Sometimes its nice to know that you are not alone....but in this case, I wish we weren't.
The banks and the government want us Canadians to knock it off with with credit spending. Very soon those low interest rates that we are paying on our mortgages and lines of credit are going to go up.
What does this mean for us? First of all, we need to start tackling our month to month with the overspending which means one of two things....increase the revenue or decrease the expenses.
Next, we need to start paying off the debt and as quickly as possible BEFORE the interest rates increase, if at all possible.
Panicked?! Yes, I am. But this blog can't be about how scared I am. The whole point of me sharing this experience is that I know that I can somehow fix this. That the inherent problem solver in me is going to figure out with not just one, but many solutions that will hopefully help us and others.
First step is the obvious....we need to find a way to reduce expenses. In the last week I have spent a good chunk of time going over our bills to define what it is that we are spending our money on and also how much we are overspending. To figure out where we can cut expenses, I have been searching the internet for articles on reducing our spending and on how to save money.
There are some really stupid suggestions like buying more or buying bulk for groceries, reducing your premium cable package to a basic package, doing a full load of wash instead of a partial load, cutting back on watering the lawn, turning off lights you aren't using, turning down the thermostat, stop buying designer labels, and my personal favourite......stop renewing your annual travel insurance.
What planet are these money saving experts on anyways?! If my monthly budget for groceries needs to be reduced, it would stand to reason that having an extra inventory of macaroni sitting on my shelves may be money saving in the long term, but at the end of the day, its really just money sitting in my cupboard.
What premium cable package? Who doesn't do a full load of wash these days, especially with five people in the house? Frankly, I would be better off to make these kids wear their clothes till they are good and dirty which would cut down on the overall loads than to follow that lame suggestion. Watering the lawn....really?! We live in Atlantic Canada, if your lawn isn't watered, wait five minutes.
I live with the light and heat Dictator....no joke. Friends and family bring thermal underwear and slippers to our home outside of the summer season. Our daughter nearly froze to death last night because she forgot to take the extra comforter to bed with her. She also forgot that Daddy turns down the heat before he goes to sleep.
Designer labels, please. I have some clothing and shoes that I have been wearing now for 15 years! If you change locations and or friends often enough, they won't notice.
And for the finale, .......travel insurance. When was the last time we travelled anywhere?! Our idea of travel is a picnic brought from home, a trip to the park or the beach, and done in a day. It hardly requires any insurance.
Somebody throw me a frickin' bone here, because there has got to a better way of doing this beyond all of the normal everyday things we already do. And dammit, I will find a way!
Ok, so good movie to watch is "No Impact Man" not because you are trying to make no impact or even lessen yours but a piece of the method behind his madness is to let go of as much as you can and then feel what the things are that you really just can't do without. Keep in mind he's EXTREME but who knows where just a piece of that could take you. I'ts funny, once you start looking at things like not having any trash you think from a different perspective about what comes in. Maybe that could help. Hope I don't sound like I'm on a soap box because I certainly know I have places I can make some changes. We did have a few years there where our income was (astonishing, I almost don't believe it) but we hit a low one year of $5,000 with 3 kids. I am so wishing for you to find some peace (still looking for that here to) around finances.
ReplyDeleteI should follow this all with WOW, you amaze me Miranda. You are a Go-Getter, Make-It-Happen kind of being and I'm loving the inspiration you exude.
Thanks so much for the recommendation! I checked out his blog this morning and watched a couple of videos, the first one being, "The high price of materialism." Definitely gives me a starting point for identifying if there is an opportunity through this journey not just for debt reduction but also for a changing of values and ideals. It certainly helps and you don't sound like you are coming from a soap box, but rather from a place of experience and wisdom. Would love to hear about some of the ways you and your family survived through the year of $5000...I know there are families out there right now struggling to get by beyond what we are going through and shared experience brings hope for many. Thank for the oodles of compliments...it means alot to a gal who feels deeply flawed most days but in a good, I'm working on it kind of way!:) Cheers!
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