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Thread: Serious Question About Debt/Budgeting

  1. #1
    KanewtZ kanewtz's Avatar
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    I keep reading on here where people need budgets and are constantly in debt (and trying to get out of it).

    I don't really comprehend it.

    Do people actually buy stuff (on their CC) that they don't have the funds for in the bank?

    Do people really bite off more than they can chew?

    This whole concept seems surreal to me as to why someone would do it. Is it an addiction? Do they just not care and feel that debt is "acceptable" in society and are fine with paying high interest rates?

    I am in no way mocking/poking fun or belittling anyone who does this...I am just confused as to why someone would do this?
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    Matt


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    Senior Canuck
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    Sometimes it is not a matter of addiction, or lack of self control, or trying to keep up with the Jones'. There are real, painful reasons like a job loss, or any other emergency, and you have no other choice to use CC cards to buy food for your family, or to pay for rent.
    I understand that we all should have an emergency fund kicking around for these reasons as well, but lets get real, not everyone can put away that 10% every month.
    Personally I do not believe in CC debt and don't have any myself, but for those who do for reasons beyond their control, and not just in CC debt because of wanting everything, we have to look mercifully on those for sure!
    Last edited by maggiespice; Sun, Mar 10th, 2013 at 12:35 PM.

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    Frosh Canuck
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    i can only speak of my situation. i was in a relationship where my husband believed just putting it on the card was o.k cause we'd just pay it off later. his logic was we make X amount per year combined, why shouldnt we live a little. he lost his mother and had to pay for spending a week out of the province, we took trips, we got that big screen t.v. my logic was always if we want it then we can put the $ aside and buy it when we can afford it but to keep the peace i gave in believing that yup, we'll just pay it off later. now we're separating and guess who's left with the debt? and who got the big screen t.v? lol. not to sound bitter but lesson learned. everyone has their own style of money management and some people are just optimistic that things will work out.

    i'm more of a pessimist and worry about money. but on the down side, maybe too much sometimes. there should be a happy medium somewhere

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    Smart Canuck
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    I can't understand it either. I have a sister who lives "hand-to-mouth" and she doesn't see that her lifestyle is similar to a hamster on a wheel. Personally, I think she has a shopping addiction.

    We have no debt, and we made huge sacrifices early on to pay off the mortgage. I am a lot more relaxed about money now that I don't have to worry about paying off bills and such. I never was the type of person to buy now and pay later anyway. It's good to have balance though...you need to have some fun in your life otherwise, what's the point?

    It's so important to be with someone who has similar money management styles than yourself. I think a lot of marriages break up due to money problems. (ottawa, sorry to hear about your problems, hope everything works out okay for you)

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    KanewtZ kanewtz's Avatar
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    I am quite happy there are others to think like me.

    I realize this is a savings site and all and trust me, I've used it to save the cost of things here and there.

    I think a lot of boils down to that debt is too acceptable in society. I mean everyone will have home/vehicle debt at one point in their lives...but I see no reason to have CC debt.
    Matt

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    Un-nagged Male vesper's Avatar
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    My recent ex girlfriend is one of those. She used to be modest in her spending. Now she earns a very good salary, and yet her spending increased even more. She is in so much debt, I have no idea what she will do. She asked me to pay everything off for her, but I don't want to deny her this lesson. That and we broke up now.

    Frugal is a foreign word to many people, and there are a lot of people who don't plan finances.
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    One Awesome Domestic Diva MrsSunshine's Avatar
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    Im bookmarking to post on here later my thoughts.
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    Be Strong
    Be True
    Be You.
    Simple as that!

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    Un-nagged Male vesper's Avatar
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    Quote Originally Posted by kanewtz View Post

    I realize this is a savings site and all and trust me, I've used it to save the cost of things here and there.
    I used to think I was a pro until I read what other folks here do. Wow! Now I feel quite inferior!

    People with kids, students loans etc... the challenges are much more difficult than what I got.

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    Un-nagged Male vesper's Avatar
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    [QUOTE=ottawa;5318221guess who's left with the debt? and who got the big screen t.v? lol. [/QUOTE]

    Well at you got the lesson and positive attitude!!!

    Yahoo!

    P.S. I hope at least YOU got the remote control for the TV
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    Frosh Canuck
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    lol unfortunately no. i get the house though so guess i got the better end of the deal. there's nothing in it but i got it lol

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    Un-nagged Male vesper's Avatar
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    Quote Originally Posted by ottawa View Post
    lol unfortunately no. i get the house though so guess i got the better end of the deal. there's nothing in it but i got it lol
    Yahoo! Hope you have a coffee maker at least!

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    I think a lot of times it can depend on your situation. DH and I are 38 / 40 and have no kids. We have a house, a new car and live well within our means. We don't vacation unless we've budgeted for it, we have a savings account and RRSP's but again, we have no other mouths to feed or little people to clothes.

    We have a credit card but we only use it for online donating, ordering or flights back to the UK.

    Dh often looks at our neighbours and says how the heck are they all buying new toys / vacations etc but we know how, they are putting it on their credit cards / LOC's or have family paying for it. We stand on our own two feet and don't live beyond our means.

    We don't buy unless we are paying with debit / cash. We've had student debt that took ages to pay off and I am NOT comfortable with debt.

    Now we still budget because we want to build savings / rrsp's / vacations etc into our plan and I find that helpful.

    I'm happy the way we live because at times like this, when our garage door decided to go in the crappy yesterday, we can get a deal by paying cash.

    I guess as long as people are happy with the way they are living then to each their own. Everyone has different priorities. Mine are sleeping at night and with a big debt hanging over my head I couldn't do it.
    Last edited by gourmetsue; Sun, Mar 10th, 2013 at 04:17 PM.

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    Canadian Genius
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    .
    Last edited by lecale; Sun, Jan 18th, 2015 at 03:32 PM.

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    KanewtZ kanewtz's Avatar
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    Quote Originally Posted by lecale View Post
    Well, Kanewtz, I dunno...some people are just not great at the math and there are so many rewards for spending: credit card points, miles, SDM points, some people can easily be lured.

    I help lo income people deal with their bills and this one guy showed up...Bell told him that his monthly bill would be $128. So every month he went to the bank and paid that. Ahem, and he never looked at his bill. Well about 4 years ago (!) a ld phone call put him over $128. So he owed $5 plus interest....fast forward 4 years later and his bill has collected $500 in interest charges basically off this one call (can you believe Bell extended this much credit for this long) because ever since he made that call they have been charging interest on his full balance, and he wants to know what the mystery charge they are charging him so much for is because bell is going to cut him off. So wrap your head around that one baby, I see it all the time.

    In terms of financial literacy not everyone is a superstar. People are often extended more credit than they can handle and may not fully understand the contracts they enter into. An individual usually strives to have a landline, cable, hydro/heat and a cell phone these days and that's 4-5 opportunities to get into trouble off the bat. The fellow with the big interest charge believes he did nothing but bend over backwards for Bell because he always paid his bill on time...but that's what gave him good credit and got him into trouble with $500 owing. Ironically, if he had been late with his bills they would undoubtedly cut him off much earlier and he would have cleared this up years ago at a cost he could afford. Debt happens.
    I'm sorry...thats not debt happening...that's plain stupidity for not taking your finances seriously and looking at what you are spending.
    Matt

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    Mastermind Shwa Girl's Avatar
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    OP, I was surprised that Prime Minister Harper gave a warning to Canadians about debt in December 2012, and asked Canadians to make a New Year's resolution with this in mind. He said, "some people believe they are living within their means and have — thanks to low interest rates — racked up mortgage debts associated with home purchases.Many households are well within a comfort level but some have been pushing the envelope and we obviously urge them to be cautious”.
    Scary.

    http://www.canada.com/Stephen+Harper+warns+fiscal+runaway+train/7734769/story.html#ixzz2NAevahfY
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