Mikestrathdee’s Blog


Debt
January 21, 2011, 10:14 pm
Filed under: Debt

An interesting e-newsletter that is particularly relevant in today’s difficult economic climate is Gary Foreman’s “The Dollar Stretcher” www.stretcher.com.

In a recent issue, Foreman wrote about how the human gift of self-deception can hurt our finances, in serious ways. Despite our ability to think, “we also have an amazing ability to deny the facts and believe whatever we want,” he said.

Foreman’s list of examples provides a series of inconvenient truths, but barely scratches the surface.

An article in a national business paper pointed out that consumers’ expectations about how they will pay for their retirement plans frequently bear little resemblance to reality. Up to 40 per cent of pre-retirees plan to work longer in order to build their nest egg. Yet about that same proportion of the population find themselves involuntarily retired, due to health issues or job loss, well before they would want.

When it comes to spending, one-third of people say they will be more frugal in retirement, but 40 per cent spend as much or more once they leave the workforce.

Fewer and fewer, it seems are those who take the advice of 1 Timothy 6 “if we have food and clothing, we will be content with that,” to heart.

Many of us have to work at learning to live within our means to make room for saving for retirement, let alone dreaming of how soon it will happen. Bank of Canada governor Mark Carney told an interviewer recently that he is worried Canadian households are getting too deeply into debt. Consumer debt in Canada increased by 10 per cent last year.

Outstanding credit card balances in Canada have grown by 40 per cent since 2004, even as the cost of more sensible means of borrowing, such as mortgages and lines of credit, dipped to historic lows.

Overspending is one end of the self-deception spectrum . There are also the people who mistakenly under-estimate or dismiss their good fortune with the comment: “I’m not rich.”

A quick visit to the Global Rich List website: www.globalrichlist.com provides a sobering piece of evidence to the contrary for those of us who feel that the rich are those people better off than we are.

An income of $35,000 a year puts a person in the top six per cent of the world.

Earned income of  $50,000 moves you up to the top 1.78%.

An average Canadian household, with an income of $78,689 (a figure sourced from Canadian Demographics 2009), is in the top .85% in the world in terms of income.

Even when 14 per cent of Canadians are out of work or underemployed, that still leaves 86 per cent of the workforce who are blessed to have jobs.

In the early Christian Church, believers shared freely of their possessions, giving to everyone as they had need. (Acts. 2: 44-45) These days, our communal bonds have frayed to the point where people are reluctant to let their congregation know about job loss or financial difficulty.

In a time when Christian schools, camps, relief agencies and even some of our congregations struggle due to decreased giving, how shall we respond? Let’s talk about it.

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