Debt Dummies & Dr. Doom Here

I just had a phone call conversion with an old friend from up in Terrace who is going through a bit of a pickle with his personal money situation. He was terrified and decided to look me up after nearly ten years of no contact. The last time we spoke, I was experiencing my own financial trouble with the then HSBC down here in Vancouver, and how I all-of-sudden awoke one day to find my life in ruins from just one bad money decision I made. He was moving back up North becuase he could not find a house that was in his price range. Even back in 1999, times in Canada were oddly rough for most wage earners. So he found me and was desperate to find anyway possible to save his home and family.

I am not a financial expert, nor am I even close to being a guru on such matters. I solved my problems through very unconventional means, but the sacrifices that I made back then are not something endorsed by the mainstream. In fact, and I can say this quite loudly, my answers and current practices are considered atrocious by the Banking community, but nonetheless, solved my problems, and freed my life substantially.

To put it simply, my friend’s days of being a home owner are numbered. He has been given his eviction notice from the Bank and mortgage company, and the house will be placed up for sale in a matter of a few weeks. His family is also going through the pains of this huge upheaval. Both him and his wife are now unemployed as the jobs that they held up in the area have since downsized and  shrivelled up. He is now doing cash jobs, scavenging metal from old equipment left out in remote logging sites from over the years and transporting it to scrap dealers in the Pacific North West.  It is very labour intensive, and his return on investment very low.

His issue that he wanted to talk to me about was how to keep his family together. His wife, who seems to be taking the eviction harshly, is so depressed that she is on medication from the stress. His son, 9 years of age, is not performing in school as well as he ought to be, thus adding to an already over boiling pot of stress that he is trying to deal with. And with the pressure to keep the kids fed, dressed and going to school, so too are his needs of finding enough money to pay for gas to work, while on top of this, looking for an affordable place to rent, thus trying to save for the damage deposit and first months rent.

He did try to apply for help with the government, but he quickly learned that there was no help to be given. He never qualified for Employment Insurance while his wife’s income from the insurance benefit only pays for the food and utilities. Government compensation is limited to scarce for most Canadians families in need in today’s economy.

The hope that I offered him was that of change. Adapting and changing in this world of evolution seems to be the key to surviving economic shifts like the double dip rescission that we are in today. Change is rough, especially up North, when everything changes so slowly and lifestyles are always a generation behind. He needs to take a page from the people of Vancouver and surrounding areas in the South. Here, rent consumes on average 80 percent of ones total income for low income wage earners–he needs to follow that up their in Terrace–living with less income.

So, therefore, a lifestyle change is needed to reflect this new era of Canadian living, and that is strictly based on being a smarter consumer. Gone are the days of impulse buying and the use of credit cards. Habits such as smoking and drinking are costs that really need to be taken in to consideration with limited income, no matter how depressed today’s social climate is, he needs to stop this. Going back to a single car, and buying in bulk from large shopping centres and big box stores is the new norm now, and is almost a necessity.

So, I thought about the tone of the words that my friend used when we talked over the phone, and it inspired me to write this post. Everywhere I look, I can see the signs of this playing out. I now think that the second wave of economic chaos is going to be more negatively stronger than the crash of 2008-9. What is different is that we are still spending like the first wave never happened, but this time, it is all credit and borrowed money, not savings and cash. I do not see very many people planning ahead, but instead willing to duck and cover, maybe using the bankruptcy card to play when the dam breaks open?

I wish my friend from up in Terrace well, and hope that his him and his family will weather this storm fairly.

2 Thoughts on “Debt Dummies & Dr. Doom Here

  1. I hope everything works out with your friend and his family too. There are many families in the same boat. Yes, although it’s not fun to change and become more frugal it will help. Building an emergency savings no matter how small, buying clothes at thrift stores (hey there is some nice stuff there), stopping overspending on holidays — there are ways to cut down. There are often ways — albeit small ways — of increasing one’s income too. Throw in a non-defeatist, survival attitude and some creative problem solving by thinking of all the possible options for solutions — these can all help. (I’m not a financial expert either, but have also solved some of my problems practicing what I preach.)

  2. Yes, I agree. Spending more responsibly is a main point, but I see adapting to change as an even bigger aspect to any shift in the business cycle.

    I will contact my friend again in about a week to see how he is doing.

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