Special guest blog by Pierre Roy, President and Bankruptcy Trustee at Pierre Roy & Associés.
People get in debt for all sorts of reasons: job loss or reduction in pay, divorce or separation, an illness, a large unexpected expense, etc.
But regardless of the reasons for people’s debt, it is obvious that this is a situation that we would prefer to avoid at all costs.
If you get into debt easily, you may have traits in common with our 5 (fictional) characters below:
Simon: the guy who wants everything the others have
Simon is a competitive guy… and he is a little jealous. He wants to have all the new gadgets, tools and toys his friends have. He also wants to do all the same activities and travel.
Simon is in debt because he always wants more. He is not pleased with what he has. He must learn to live happily with fewer material things.
Nicole: the girl who lives the “American Dream” through her credit cards
Although it is normal to borrow to buy a house, a car or even to pay for your studies, Nicole does not stop there. She uses credit to pay for everything: groceries, gas, furniture, appliances, restaurants and even trips.
Nicole lives the “American Dream”, but she also has a large debt. Nicole must learn to live within her means.
Ben: the guy who wants everything NOW
Ben is a smart guy. He is educated and employed. The problem is that Ben cannot wait and must have everything… today!
To Ben, it is out of the question to save in order to buy anything. There is still hope for Ben, he just needs to work on his patience and enjoy the wait.
Charles: the guy who has never made a budget
Charles has a lot of life experience, but he has never made a budget. Accustomed to living from paycheck to paycheck, he never took the time to plan. It is not surprising that today he is deep in debt.
Charles should sit down and take a few minutes to make a budget. And if he knows how to handle a computer, he can even do it online.
Marie: the girl who has no savings account
Marie has one bank account: her checking account. Don’t talk to her about RRSPs, TFSAs, mutual funds or investments because she doesn’t want to hear it. She simply lives with what she earns and the rest doesn’t matter.
The problem is that Mary wouldn’t be able to cope with unexpected expenses. She won’t be able to make a down payment on a condo or a house. Marie should meet with her banker and plan for the future. She could even set up an automatic savings.
If you recognize yourself in one of these (fictional) people, don’t worry, your situation can still be corrected if you take healthy financial habits.
To meet with a licensed trustee in one of our eleven lower mainland offices, please contact us for a free, confidential consultation.