Drowning in debt is the new normal in Canada

[Ciel]

Schools do teach about money-it's called the cost of participating in hot dog or pizza day, having milk for lunch or class trips. No money, no fun--and having to watch others go on trips or do things you may not have $ to do hurts in many ways.
Same with a crafts afternoon I recall way back in grade 6-you needed to pay to craft. So I chose the 25 cent paper puppet activity as money was tight, though I wanted to do the $3 macrame activity.

[greentires4me]

For some reason they teach Math, Trignometry, Algebra, Geometry , Calculus in our Schools, but they never have a subject called MONEY or BUDGET in our schools.

I think at least High School should have a subject called MONEY/BUDGET - where they teach you how Credit Cards, Debt, Mortgage, Compound Interest on loans and balances, leasing, financing, RRSP, TFSA, Bank accounts etc works. This will help students more in life than complex Calculus !

I see College and University students using Credit cards like they are Debit cards or something ! No idea how much interest they are paying on the outstanding balance and how expensive it is !

It's so true where is the reason behind it?

When I took out student line of credit they gave me a credit card to take out money for books and school supplies but I used all that money on bus passes maxed it out but then I had a limit of money my credit card and always pay more then the minimum and they raised in one year up to $8000 and told them that was dumb why didn't they tell me they just did it without my consent! I hate BMO and TD their the worst banks for raising things without your consent


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[johnb56789]

It's so true where is the reason behind it?

When I took out student line of credit they gave me a credit card to take out money for books and school supplies but I used all that money on bus passes maxed it out but then I had a limit of money my credit card and always pay more then the minimum and they raised in one year up to $8000 and told them that was dumb why didn't they tell me they just did it without my consent! I hate BMO and TD their the worst banks for raising things without your consent


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Credit in general can be a scary thing if you don't know how to properly use it (I.E. the best way for a credit card is to pay it off every month as I've always done). I'm getting myself a Student line of credit and have to be careful with it, using it to buy a car (I have enough for it in cash, but don't want to drop that much all in one chunk and this helps to build up my credit score), have set a hard limit on my line of $10,000 and can put a hold on it once I get below $5,000. Only have to pay interest while still in school, but of course I'll pay a lot more than the interest payment monthly (I'm thinking about $50/month while the payment should be less than $20 for the interest portion of it)

[walkonby]

Schools do teach about money-it's called the cost of participating in hot dog or pizza day, having milk for lunch or class trips. No money, no fun--and having to watch others go on trips or do things you may not have $ to do hurts in many ways.
Same with a crafts afternoon I recall way back in grade 6-you needed to pay to craft. So I chose the 25 cent paper puppet activity as money was tight, though I wanted to do the $3 macrame activity.

I sure agree about that @Ciel
There were many times we were insulted to have to keep forking out cash for things my 3 kids wanted to participate in while at school. The parents that had $$ to burn had no issue, the ones that were poorer than poor got " assistance " and we were somewhere in the middle. Just my sour grapes coming through.

[Ciel]

@walkonby -with your kids a generation behind me, you probably had the parent council reach out for numerous fundraising activities as well plus volunteer time too. I did not have to worry about milk but one friend who bought it weekly (buying a week's worth of tickets) sometimes got shorted one day per week if she did not go early during lunch break to collect her milk carton. Thought that advance ticket sales were a way for school to track demand for supply so I still do not know why that happened to her.

[brunt]

Education is a good investment in your future. With your fantastic couponing skills, you are going to continue to keep your household costs down and pay off your student loans quicker than many students.

Just to nitpick here - education can be a good investment in your future. Many courses at the university level are a massive waste of money if you just consider the potential for increased earnings as compared to the costs of attending plus the years of lost wages. I regularly recommend trade school as a far better option from a cost/benefit standpoint. Yes, one may enjoy going to university, but the days of simply getting a degree of any sort and waltzing into a high-paying, secure job are decades past.

Lest I be seen as a basher of post-secondary eduction, I did 11 years myself for three post-secondary degrees. For six of those years I worked full time and attended school full time.

[Frugalbigmama]

I sure agree about that @Ciel
There were many times we were insulted to have to keep forking out cash for things my 3 kids wanted to participate in while at school. The parents that had $$ to burn had no issue, the ones that were poorer than poor got " assistance " and we were somewhere in the middle. Just my sour grapes coming through.

I think less people participate in milk/hot dog day etc then you think. Hot dogs are disgusting and we choose not to eat them. Milk- Well having to pre-pay for the month and then no refund if not there/ or DS just not receiving it/worrying that it is stored properly and cold when her receives it. I just send it in a reuseable container. DS only had one school trip (end of school year trip) but did participate in extra sporting events that cost money and some that were funded by the school. At the end of the day having kids cost money. I usually put money aside each month for "school expenses" so I have it ready. Just like I know that grade 8 grad and the "big" end of school trip is coming next year (2 years ago the cost was around $600 plus spending money) I know it is coming so I am planning accordingly.

[Frugalbigmama]

Just to nitpick here - education can be a good investment in your future. Many courses at the university level are a massive waste of money if you just consider the potential for increased earnings as compared to the costs of attending plus the years of lost wages. I regularly recommend trade school as a far better option from a cost/benefit standpoint. Yes, one may enjoy going to university, but the days of simply getting a degree of any sort and waltzing into a high-paying, secure job are decades past.

Lest I be seen as a basher of post-secondary eduction, I did 11 years myself for three post-secondary degrees. For six of those years I worked full time and attended school full time.

Agree!! I could go on about this but I think you hit the nail on the head. I have 2 boys and each are taking different paths. I support both of them.

[matty's mom]

I completely agree with money courses being taught in the school. We have little man on an allowance right now and he is learning. He has "bills" to pay out of at money- ie. hot lunches etc.

One of the problems I see with credit is that it fosters good old fashioned greed. "I want therefore I buy". Consequences of our actions these days seems to have little affect on our behaviour until it is too late and the lesson had to be learned the hard way. Why? I don't know. I worked for high end home decor store, and saw two of our "regulars" on "'Til debt do us part". Greed is a lot harder to deal with than ignorance.

[brunt]

Often, it is a messed up time preference (https://en.wikipedia.org/wiki/Time_preference) that is at fault here.

Time preference is a concept that economists use to describe human actions. Specifically, it describes how some people will claim to be acting rationally by spending money now on life's pleasures, whereas others will also claim to be acting rationally by delaying enjoying life's pleasures by saving money and having that money, plus accrued profits used to procure more pleasures in the future. Economists will say that the differences in behavious are due to the different time preferences of the two individuals - those with high time preference will tend to worry about their position right now, whereas those with low time preference will plan for their position in the future, often sacrificing their position now.

This is a very important concept, and one that is not taught or celebrated. In fact, constant bombardment of commercials stating "you deserve it" are promoting the exact opposite. It should be noted that psychological experiments (The Stanford Marshmallow Experiment) indicate that the ability to delay gratification translates into higher achievement later in life.

I have two major problems with debt:

1. When fighting against interest being charged to you, it makes it far more difficult to overcome the increased costs - especially during times of financial strain, and
2. Debt allows you to not only have a low time preference, but a negative time preference in that it allows you to enjoy the fruits of labours that you have not even started yet - why deny yourself and be responsible when you can enjoy yourself now.

Traditionally, people were encouraged to save money as they earned it. That is, the fight was between saving and investing your income versus spending your money as it came it. Credit makes this even more extreme as you can even spend money that you haven't even earned yet.

I partially blame the whole mentality of "I want my kids to have a better life than I did". That's a fine sentiment, but more often than not, it is executed by simply giving the kid more stuff and less work. Hardly the recipe for a more successful life.

My mom did not live in a place with running water until she was 18. My grandmother did not until she was 70. In comparison, my childhood was far better. But "better" does not mean that it has to be easier lest we fail to impart those concepts, like time preference, that are vital to ones success in life.

This article indicates to me that as a society, we have done a terrible job at teaching the importance of time preference.

[Tommycoupons]

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