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Canadians Spend More Than They Earn

29 October, 2010 / by marketing

According to 37 year old web developer Adrian Lebar, debt is a fact of life for Canadians. “debt is by far our greatest expense. Debt and a mortgage is just a fact of life if you want to own a house at my age. It’s unfortunate that we have this in Canada.”

It seems that Canadians are overspending quite a bit. Instead of purchasing that affordable Ford Taurus as their next car, Canadians are more interested in status and image, which causes them to purchase a new Mercedes.

The chief economist for TD Bank-Craig Alexander-says “6.5 per cent of Canadian households are financially vulnerable, with families paying as much as 40 per cent of their income to service debt.”

In my opinion, this is ridiculous! People need to learn how to budget better. During the house purchasing process, most people sit down with a mortgage broker to determine a payment process. This allows the homeowners to have a hard figure in their mind of what must be paid on a monthly basis for the house. It is then up to the homeowners to roughly figure out what their other monthly expenses will be-groceries, gas, hydro, clothes, and whatever other firm expenses. After this point, the homeowners will have an idea of how much they are required to pay out on a monthly basis.

It shouldn’t be too difficult from this point forward. Make sure that your other expenses are not too high. Do not purchase frivolously. To really stay out of a mound of debt, ensure that your expenses are less than your earnings. If this means that you have to live in a town house instead of a full sized house then do it.