LIVING WITHIN YOUR MEANS

It is no mystery that we are living in a world of consumerism and instant gratification. We want it, and we want it now. Extravagant luxurious trips, expensive purses, brand name clothing, big houses and fancy cars. There are a vast majority of people that attach their worth and success by the size of their home, what it looks like, what clothes they wear and all the places they have travelled, instead of what their level of happiness and joy is. They constantly want to be better than the other guy. Have the nicer house or the better garden.

It is also no mystery that the big banks love this new generation of spenders. In my lifetime of 41 years I've seen it go from being almost impossible to get a loan, to the banks bending over backwards to lend me more money. And individuals fall for the bankers pitch. I know, I used to work in one. We were encouraged to sell sell sell credit products. And to do this we had a complete insight in to what a customers dreams and aspirations were, all at our finger tips while we talk to you on the phone or in the office. We knew how many kids you have, what you talked about in your last meeting at the bank, what kind of car you drive, if you have ever mentioned wanting to take a vacation. Every thing you have ever said to your Personal Banking Officer is in an electronic file that almost every banking employee has access to, while they are conducting business with you. This way we knew in which direction to steer the conversation to sell you the credit products. We were encouraged to offer people lines of credit against their homes and then sell insurance to cover the line of credit. I once asked if this wasn't in fact just a reverse mortgage, to which I was reprimanded. I was never to utter that statement. It may scare the customer. God forbid we tell the consumer the truth. We must never let them know that borrowing every cent that we have offered them, on their income, will be at some point impossible to pay back. They will in fact be in debt for their entire lives. And the banks love this. I have seen people take equity out of their homes to buy cars, go on trips or whatever it is they feel they NEED. They say they deserve it. But really what you are doing is supporting the banks with all your interest payments. Silly. So silly.No one needs anything, except for food, clothing and shelter. Didn't we all learn this in Consumer Education Grade 11?

Not too long ago I was having a conversation with someone who was lamenting about how their commute was so long, and life was so tiring. "We are never going to be able to quit work" they said.  As I was listening to them go on, it crossed my mind that they were currently living in a $750 000 home, debt free. If their life was truly so bad, wouldn't they just downsize? But during this conversation I was hit with a sudden clarity. Every one wants the good life of freedom from the burdens that needing money brings but they really want their stuff too. No sacrifices. The thing is, people are sacrificing their happiness and health because they don't want to give up things. Seems silly when you look at it that way, doesn't it? I'm not saying that having the house of your dreams is wrong, or if you can afford it, having luxurious things is bad. Not at all. In fact if  things have worked out for you that way, I applaud you because you made some very smart financial decisions. Good for you. I know some of you that are reading this made those wise choices, and all I can say is, you are a great example to others. You made those hard choices between vacations or paying of your debt. That is awesomeness. The key to all of this though and what I am talking about is affordability.

The amount of debt people are carrying these days is staggering. My philosophy has always been this. If you can't afford it. Don't buy it. Generations before us actually saved up to buy something. Strange concept, I know. There is also something called a budget. Live with in it. The thing is, it is becoming almost impossible to do this. Cost of housing is so large, we are forced to get a mortgage. Not too long ago the banks were offering 35 year mortgages to their customers. Now in Canada they have lowered it to 30 as the housing bubble was looking like it had no end in sight. Who in their right mind would get one of these mortgages? That would mean in all likely hood, when you retire, you still have a mortgage. Ludicrous. You are basically banking on the fact that your house will still be worth what it is now, when the time comes. But what if it isn't? And how much interest have you paid on that loan over the course of 35 years? The thing is, because we have all jumped on the credit band wagon, it has become almost impossible to reverse this way of thinking.

I have had people tell me, just borrow the money, you need that vacation, you deserve it. You've worked for it. Really? Do I really need to go for 2 weeks to a beach and drink margaritas and then come back, holiday over and now I pay the bank for the next few years. What? Why? I would rather be in a tent on the side of a lake listening to the Owls at night. That's what makes me happy. And it is super cheap too.

I know I'm coming off negative. I don't mean to be. I am just really passionate about becoming a debt free society. I want my kids to grow up in a society where you are judged based on who you are as a person, how happy you are, and how kind you are to others. Not by your fancy car or name brand clothes. I want to teach them that it is not ok to have massive debt hanging over you each and every day while the banks get richer, and we as a society become poorer.

There are so many great ideas out there to teach you a different outlook or view on society. I love the idea of downsizing. Tiny houses are a great way to do this.  The environmental footprint is so much less. I mean, I know so many people that talk about how green and environmentally responsible they are, but live in a house meant for a large family, not just two people. A Tiny House surrounded by veggie gardens and fruit trees is a goal of mine when the kids grow up and move on. Another great source of information of living within your means is Mother Earth News. A great wealth of information about everything from living off the land, to being off the grid to spending wisely.

I hope that one day, we can live in a time where money and banks do not control society, and where we aren't programmed by media to tell us what will make us happy and or have self worth. Maybe if we as parents guide our children in a way that changes this way of thinking, we can help to create a smarter and better generation than what we have become.