Back in my day …

Before I begin this post, I just wanted to give an update and say that I have ceased my RRSP payments and will now be saving $100 biweekly in cash, to be put entirely towards my emergency fund and car payment.  I’ve been mulling over what to do for awhile, but I just want to get my car loan off of my shoulders.  I think with accelerated payments, I will be able to probably have it paid off by my goal time, December 31st 2011.  It’s a TON of money but I know I can do it.

This post is in honour of my grandparents, and for grandparents everywhere who impart valuable lessons.  I also have to be careful … last night as I was writing this, it turned into a bit of a rant, so this version is the slimmed-down, less angry version.

What inspired this post was the following email, sent as a “back in the day” throwback embedded in a Valentines email to all the grandkids:

“… 50 years ago on February 24th, 1961,  we moved into this house. We had hardly any furniture (but enough to manage). We moved here from a one bedroom apartment, because we needed the extra space. As luck would have it, our car stopped working that day. It wasn’t worth fixing, so we were carless for the next two years. Those were the days when people went without until enough money was acquired to make a purchase. The exception was real estate where plans were available for people to make a down payment with mortgages for many years ahead. It likely would have been possible for us to have made some kind of deal like that at a car lot, but it was expensive to pay interest all the time. Anyways, we managed fine, and got our groceries by taking our new large baby buggy to a large grocery store over on Main Street.”

My Grandparents' 1960s Grocery Cart

This email really stuck with me because it reminded me that “back in the day,” if you wanted something, you saved for it.  I think mostly everyone can agree that the current cultural mindset is “buy now with credit, pay back later.”

Everywhere I look nowadays, there is inevitably an ad screaming:  “Pay 0% financing!”   “Get 1000 bonus points when you sign up for our credit card!”   “Sign up now for your free line of credit!”

These ads are of course competing with the multitude of debt organizations out there, such as In Charge Canada, which advertises in premium spots on my morning radio show, so they are presumably making a killing off of the poor shmucks who sign up for all this “free” money.

Many personal finance bloggers started their blog during or after they bail themselves out of debt (just check out my blog roll, most of the authors featured there have been in some kind of debt during their lives and figured out various ways of defeating it).  Debt is all too common and almost expected.  It’s rare for me to find anyone who says they don’t have a debt of any kind, with the exception of a mortgage.  Student debt, credit card debt, financed with interest auto loans, it’s all pretty much the norm.

Sometimes I get jealous of my friends who have the perfectly coordinated IKEA living rooms, new iPhones, flat screen TVs, and new clothes from Queen West (a trendy fashion strip in Toronto).  I also get jealous at my friends who eat out all the time, buy pitchers of beer without blinking, and go on ski trips up North.  I think everyone knows people like this in their lives, the people that you look at and go, “How the heck do they afford it?”

I really don’t want to speculate on their finances, and perhaps they really can afford all these shiny toys.  But Canadian households on average simply can’t.  Not only is the average Canadian household debt $100,000, the Western world is struggling with crippling debt.  The thought of a country in debt actually terrifies me.  a) when are we planning on paying it back, and to whom? and b) how the hell are we going to do it when our individual debt is six figures?

Right now, I have a hybrid of my grandparents’ sensibility and generation Y’s need it now attitude, leaning more towards my grandparents.  I shop at Value Village for the majority of my clothing.  I contribute regularly to my savings.  I never buy anything on credit that I can’t pay within the same billing cycle.

But it’s not very glamorous.  I live in a 300 sqft basement bachelor apartment.  I don’t have enough room for a kitchen table, so I eat on my bed.  I can’t really entertain friends if they come over, and I can’t afford to eat out very often, maybe once a week.  I never buy books or movies, I always borrow them from the library instead, and on the rare occassions that I go to the bar, I never order more than two glasses of wine, tops.  I make for pretty boring company sometimes, and I do frequently have to turn events and parties down.  I recently had to miss my friend’s musical theatre show in Mississauga, because the gas money and the ticket would have just been too much.

Any longtime blogger and financial writer will tell you the same thing:  it gets way better, just keep at it, spend less than you earn and save the difference.  But do you ever just feel like you’ve been at it for so long that you just want to say screw it, and blow all your savings on a crazy trip to Costa Rica?