Debt

Let's talk money. Money, money, money (must be funny, in a rich man's world!) In my culture, money is not talked about. Our parents would never announce their salaries (even to their own parents), or discuss household debt. My Mom still gets squirmy if she hears people chatting money, and warns me never to disclose specific details to other people - and she has a point! Sometimes when people know how much you make (and if it's a good salary), they automatically assume that you can afford to pitch in more than your share, or pick up the tab at family/friend social events. If not that, then snide remarks about your purchases can often be heard behind closed doors.

Times they are a changin' though and slowly people are talking more about money and its significance in our lives. Why? The recent economical meltdown has been a catalyst for change, and families are starting to realize that out-of-control spending and debt does not lead to a better life. Sure, we may have the cars, the house, the best clothes and the best toys for our children, but what happens when the money no longer trickles in and the debt we have gathered explodes in our faces? Bankruptcy, defaults, shame and despair is what tends to happen. And divorce! (check out this story on financial infidelity)

Did you know that Canadian families are now carrying more debt than they ever have before? We're buying things we can't afford, and using credit cards to meet our regular expenses such as gas and groceries. It's scary to think about, and to know that we're not immune to the financial crisis that took place down in the U.S. (and to a lesser extent, here as well).

Hearing these stories, and reviewing all of our income, bills and expenses, I've realized that our family is not immune to this national trend. Yes, we pay our credit card bills each and every month, but why are we charging things like groceries anyway? Shouldn't our budget include a set amount of cash for these types of necessary expenditures? In addition to credit cards, we also carry a small line-of-credit and a much heavier OSAP debt.

I read an inspiring story in Today's Parent the other day about a family who paid off their mortgage by the time they were in their 40s! And you know what? It really didn't sound that hard! (keep in mind that they have one child - much easier to allocate spare cash to debt when you don't have 2, 3, or 4 mouths to feed and bodies to clothe!)

When I think about how much extra cash there would be each month when we no longer have line-of-credit and OSAP payments, I get really excited! That extra chunk could be going towards our mortgage, which will help us to pay it off faster than the 25 years we have allocated ourselves. I'm not one to base all my decisions around our far-off retirement (I do like to enjoy life right now!), but I think my frugal Grandpa Hall would be smiling down on me if our family started to work towards financial stability.

And so, the first line of business is to begin using all "extra" cash (e.g. doula fees, surprise government payments like the HST rebate, and monthly child tax benefits) to pay off debt. I'm confident that we could have everything paid off in 2-3 years, which would then allow us to focus solely on our mortgage and long-term savings.

I'm ready for the challenge....how about you? Will you join me?