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Canadians go into bankruptcy primarily because of consumer debt. This is debt that is built up buying things that we want, often on impulse, but don’t really need. If you’ve ever lived in an older home, for example, you may remember how little closet space there was. People simply didn’t own that much in the way of clothing—they had everyday clothes and one or two outfits for special occasions.
Thirty years ago, an average household had a small phone bill and perhaps a cable bill. Now we pay for cell phones, portable wireless on PDAs, a land line, internet service, cable plus, movies on demand, etc. It’s not uncommon for people to spend more than $500 a month just in telecommunications fees. And then there are all the tempting gadgets—a home entertainment system at half price is still a couple of thousand dollars spent. And most of us buy it on credit rather than cash.
We receive a constant stream of messages that we “deserve" it. Maybe we do, but can we really afford it? Make a list of wants and needs. You need winter boots to stay warm, but you don’t need to spend $300 on them—that’s a want. Take care of your needs first and then you can enjoy purchasing your wants without ever having that uneasy worry about how you’ll pay for them down the line.
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