Learn From Those Smart, Stingy Boomers and Think Before You Spend

MNP's TAKE: As we head into the holidays, it's all too easy to watch the spending add up. Between holiday parties, decorations, groceries and gifts - the dollars leaving your account (or worse, going onto credit) can become overwhelming. 

Pair holiday spending with the fact that many Canadians are carrying debt at an all-time high and struggling to meet household needs on a day-to-day basis - and you have the perfect storm for financial distress. How can the average Canadian set aside the recommended 3-6 month 'contingency' fund when they are struggling to make ends meet as it is?

There is no simple solution as everyone's financial situation is unique. A good place to start is to create a detailed and manageable budget you can commit to that allows you to set aside money each  month (or pay period if that is easier) while also meeting your monthly financial obligations. This may mean some compromises (and perhaps less gifts under the tree), but in the long run it will help you build towards a bright (and stress-free) future. Now that's something worth celebrating! 

To learn more about what debt solutions are available to you and how you can come up with a customized strategy to manage your debt, contact Grant Bazian, CIRP, Trustee and the CEO and President of MNP Ltd. at 778.374.2108 or grant.bazian@mnp.ca

BY MARSHA LEDERMAN FROM THE GLOBE AND MAIL

The Big Holiday Toy Book arrived with our newspaper this week, with glossy offerings such as Avengers Monopoly and Monster High building sets. Intercepted by my eagle-eyed seven-year-old as I attempted to discard it with a do-not-pass-Go trip to the recycling bin, this catalogue has provided hours of fun for the whole family! It even came with a helpful, detachable “all i [sic] want for Christmas” list.

My son, ignoring the fact that we do not actually celebrate Christmas, got to work, filling out the form – including corresponding page numbers in the designated spaces – with requests such as the Hot Wheels Spin Storm and the Lego Minecraft Dungeon (because nothing says celebrating the birth of Christ like spawning zombies).

His 11-year-old brother, scrutinizing the selections the other night, looked up and announced, “$1,047.74!” He had calculated the cost of buying everything on the list. “And that doesn’t include tax,” he added.

We will not be laying out this kind of cash this or any holiday season, but as someone who would have once described myself as an enthusiastic shopper, boy, do I understand the temptation.

I’ve been reading The Globe and Mail’s The Boomer Shift series with fascination, dread and, I admit, some envy this week. While boomers prepare to cash in on generous pension plans and cash out of real estate bought on the (relative) cheap, trouble is looming for the next generations, with rising healthcare costs and a shrinking labour force – and slower economic growth.

I worry about the prospects for Generation X-ers such as myself (and, worse, for Millennials) when we start hitting retirement age. Unlike some of the people profiled in the series, I don’t see myself building a dream home in Costa Rica – or having a paid-off house at 61 (or ever).

Even if you don’t live in Vancouver, you have no doubt heard about our real estate woes. Housing prices here are through-theroof ridiculous: In my East Vancouver neighbourhood – we’re not talking about the much pricier west side – a tear-down bungalow will cost you a million bucks (more if the land is developable or, imagine, the home is actually livable). With Baltic Avenue properties at Park Place prices, the market has become inaccessible for anyone who didn’t buy in some time ago, doesn’t have a large chunk of cash at their disposal – say, an inheritance or family money – or doesn’t have a huge income (some earners with generous salaries still can’t afford to buy).

That leaves all kinds of hardworking people who can’t own a home here. Their options – at least until/if the bubble bursts – include a long commute to the suburbs (where homes aren’t exactly cheap, either), a move out of town altogether or life as a renter (and rents are high while the vacancy rate is low – 1.4 per cent as of last spring).

This is an issue elsewhere, too – Toronto, in particular. Stats this week show that Hamilton, where some Torontonians have moved for this very reason, is also experiencing a sharp increase in housing prices.

I remember standing on the porch of my childhood home – a modest, North York bungalow – while my mother tore open a letter from the bank with glee: The mortgage was paid off. I didn’t know what a mortgage was, but her joy at what she found in our mailbox was unmistakable.

She was probably about the age I am now.

It seems certain this kind of notice will never arrive in my mailbox (or supermailbox, depending on how things go) – and many of my Gen X contemporaries are living the same experience.

We have crushing mortgages and lives that are dictated by being house-poor. We sport supermarket-bought wardrobes and take staycations in service of our debt. Sock money away? Ha.

Many of us are woefully unprepared for that rainy day – or retirement. I came across a terrifying poll result recently: A 2014 BMO survey found that 34 per cent of Canadians hope to win the lottery to help fund their retirement. As they would say on Twitter, I can’t even.

This is not a tale of woe by any means – I know how fortunate I am, believe me – but it is a cautionary tale.

If only I had saved more, invested earlier, purchased less footwear over the years, maybe I would be writing this from the basement I so desire (a place to put all those toys!) or the backyard. My tiny but beloved East Van duplex has neither.

I am not blaming the victim. I recognize that my cohort and those after us are up against an environment (employment and otherwise) that is much more fraught than the boomers navigated. But boomers weren’t simply handed the keys to their monster-home kingdoms; they scrimped and saved, made sacrifices. We do have some measure of control over our finances.

I am probably the very last person you should be taking financial advice from, but I urge you: If you are young, or even if you are not, think hard about the choices you make.

Before you blow a thousand bucks on building blocks and board games (or boots), imagine what that money, saved, could buy you down the road – or consider the interest you won’t accumulate on your credit card.

As our boomer series experts have warned, it’s important to take action now to avoid future disaster.

Buying lottery tickets does not count as taking action. Because, chances are, your thimble is never going to land on Free Parking.

 This article was written by MARSHA LEDERMAN from The Globe And Mail and was legally licensed through the NewsCred publisher network.