A Debt-Aholic

I want to talk about money, mostly because I have very little and for the first time in my life I am living within my means. The end result of a year away from the workforce while pursuing education is an incredibly satisfying new career, and an insurmountable level of debt. Strangely enough, the satisfaction I gain from my work far outweighs the stark reality of my financial identity.

It’s incredibly easy to get credit these days as unsecured credit cards are handed out like candy. If we also had the financial education in place around issues like budgeting, debt-to-spending ratios and the like, this wouldn’t be so bad. I have never had a budget and don’t even know where to start. In short, I am a financial idiot. Luckily I know when I’m in over my head and I’m not too proud to seek help. While sitting down with a credit counsellor she explained the pleasure-pain principle associated with the consumption of goods. When you use a credit card you get all the pleasure with none of the pain. The pain comes later when you receive the bill. When you open your wallet and pay cash, you are receiving a healthy balance of both pleasure and pain at once. I’ve been practicing and I think I finally get it. I am living on a cash-only basis these days where every purchase has an immediate and direct impact. It’s amazing how long a ten-dollar bill will sit in my wallet. It’s also interesting to find out what purchases I actually believe are worth handing over my money for.

I have a good friend who manages his money well. He never carries a balance on his credit cards and he spends less than he makes. I am in awe of his ability to be fiscally conservative. We talk about money and I am trying to learn as much as I can about how he lives so that I can try and replicate that in my own life.

The solutions available for debt management are daunting. There are consumer proposals, bankruptcy/insolvency and everyone’s favourite – crawling into bed and pulling the covers over your head. I don’t recommend this strategy! It’s going to be a long climb up this mountain of debt that I have erected but I’m learning and I think I’m equal to the task. I’ll keep you posted.