Debt is the four letter word we all fear the most. Especially as we get older and closer to retirement. No one wants to enter their golden years with a mountain, or a hill, of debt hanging over their heads. But the sad reality is some will. And it's making many of us very nervous.
Twenty-five percent of all Canadians retire owing more than $11,000 in non-mortgage debt. Since most people don't have company pensions that is a good chunk of change. Let's not forget many will still have a mortgage too. We will all be living off of less and for many, every penny will count. Making a car payment or even worse a credit card one could really change your standard of living. So why are going into retirement owing more than the last generation?
I've read many articles written by experts who say the cost of living has never been higher. Houses, cars, repairs....they all cost significantly more. Groceries, hydro, insurance. You name it we are paying more for it. All that makes sense I suppose but we are making more money too on average. The only really "new" costs we have that our parents didn't is the internet and cell phones. Surely our iPhones and wifi aren't causing us to be in serious financial trouble.
Another know-it-all blamed it on consumerism and our wanting everything right now. This makes a lot of sense to me. I personally don't even want to wait the six weeks for a new sofa let alone saving up to buy a big ticket item. Why can't everything we buy be one-day delivery like Amazon? Asking for a friend.
But my own uninformed, not researched, no stats to back it up answer is our kids. My parents signed me up for nothing. No soccer, no dance, no hockey, no tutoring, no theater, no nothing. Parents helped you pay for education but only what they could afford. You were expected to work and save for most of it. If you didn't go farther in school well you got a job followed in close order by a crappy apartment in a not so great neighborhood with a few friends.
Most people I know plan to pay 100% of their child's education. Whether they stay local or not. Many plan to also help them buy their first home. And pay for weddings. Not even gap year travel is off the table. They never taught their kids how to be independent and will be paying for that mistake for years to come.
Adult children in their 20's and 30's are living in their parents home. Some with spouses and children of their own! Most rent free. I've heard every reason for it from "They are saving to buy a home" to "Jobs are hard to find". But their soon to be retired parents are footing the extra costs associated with their decisions. That explains why some folks are putting off retirement until well into their 70's. They plain and simple can't afford to stop working!
I'm all for helping my children have an easier financial start to life than I had. I want them to not struggle like we did those first years. But they need to stand on their own at some point. If we don't teach them how to do that we have failed in a big way as parents.
One thing my kids won't have to worry about is us retiring with a lot of debt and having no money to survive on. We plan on living in your basements, eating your food and borrowing your cars. Seems fair to us.
Ang
No comments:
Post a Comment