Living Debt Free – Radical! – Analynn Riley

Want to stand out from the crowd? Want to create a unique legacy? Want to make a difference in the world? Live debt free!

Buck the norm! Live in Canadian culture without a mortgage and/or car loan. Pay off your credit card each month!

Expect to be criticized, viewed as crazy, even alienated. Be the square peg in the round hole of this nation’s financial scheme.

This article is expressly written about those earners who spend more than they make, leaving them to service debt, often ‘robbing Peter to pay Paul’. For those with no money issues, you’re welcome to continue reading as well.

Any perks to life without debt?

According to psychologists and financial experts, income earners who live without debt:

Are Countercultural – Confident individuals who aren’t afraid to say NO to societal pressures.
Exercise Self-Control… rigorously, especially if it wasn’t learned while growing up. In the words of Thomas Jefferson, “Never spend your money before you have it”.
Don’t care about STUFF – We belabour, I think, under a very heavy crust of consumerism really. _{Emma Thompson}
Are willing to make sacrifices – Your car might be sixteen years old and branded with some rust and dents, but it works well, is affordable to drive and maintain, and it’s YOURS, not the bank’s, 100% yours!
Are generous – Often more able to share their assets and time, such as volunteering to drive a neighbour to the grocery store or medical appointment. Debt-free people are more likely to share their hard earned cash because they actually have real, tangible cash!

A free life cannot acquire many possessions, because this is not easy to do without servility to mobs or monarchs. _Epicuru_s

^{Counterculture Princeton University 2019}

Debt Servicing

For every $1.00 we bring home, we spend $1.77 servicing debt. How did Canadians get to this point? Why is having a mortgage and financing vehicles a normal course of life?

Did you know that we spend 65% more of our income on debt-servicing than Americans do? _Source Did you know that more than 60% of Canadian household debt is held by those under age 45, and nearly 50% of household debt is serviced by couples with children? _Source

Neither a borrower nor lender be. _{Hamlet, Shakespeare}

But, I want that house!

The Bank of Canada is sounding the alarm on mortgage debt… Canadians are stretching themselves thin to buy houses. _{Andrew Button}

When a youngster, I was impressed by a set of parents who purchased a house for their daughter as a wedding gift. The gift was a small, one-bedroom starter home, and it was on the same block as the papa and mamma, which often complicated things, but it was the newlyweds’ home, free and clear, totally their own. The couple would work hard, save their money, and as the housing market grew, sell their small home, combining the revenue with their savings to make a cash purchase on a larger home, one with a bit more space and a nice backyard.

The image of those parents stuck in my head. It drove me to look harder at their model of achieving the giving of a house to an offspring—

Not living under a load of debt is a must.
Raising a child to understand the concept of living within one’s means is fundamental.
Family is a priority—wanting to live near each other, and treasuring each other while working together towards financial prosperity.

From their parents’ basements to dream homes, millennials are skipping starter houses. _{Paul Davidson}

Choosing a starter home also made it easier for us to stay below the debt-to-income ratio (DTI) threshold. While I had already paid off my student loans, my husband still had student loan debt and a car loan. _{Chonce Maddox Rhea}

In 2020, Canadian non-financial businesses, governments and households owed almost $7.1 trillion in debts. That works out to roughly $186,000 per person. _Source

The Snag

In the early 20th century, loan financing became a key tool in stimulating the automotive, real estate, and other sectors. In the 1930s, John Maynard Keynes revolutionized economics when he suggested that governments could ease the impact of slowdowns and recessions by borrowing money and spending it. _Source

As television channels grew from two to a few thousand, as global culture became available via internet, and as Post-War attitudes were superseded by the philosophies, I deserve to have whatever I want when I want it, and I have a right to follow my dream, working hard and saving money are now concepts lost in the wind.

Banks contribute to I-Want thinking, cultivating their coffers by making mortgages easier to obtain. Car companies offer a safer, grander view of driving one’s life by simply owning a shiny new, tech savvy car.

Canadians are buying half a million dollar houses. $600 a month to service a car loan is typical—so is having more than one vehicle. When credit maxes out, we simply get more.

Physical comforts cannot subdue mental suffering, and if we look closely, we can see that those who have many possessions are not necessarily happy. In fact, being wealthy often brings even more anxiety. _{Dalai Lama}

Government tax revenue increases as long as people are working, preferably ALL people. The stay-at-home parent is a thing of the past. Daycare costs are high and keep many employed, thus more income earners paying taxes.

Lenders get rich on debt interest while we buy lottery tickets that promise to solve all our problems. Did you know that Visa’s net revenue for this 2021 quarter is 6.1 billion in US dollars? Mastercard’s 2021 second quarter net revenue was 4.5 billion US dollars. Indeed, our credit card purchases are creating the high life for some.

The borrower is the slave of the lender… Be not one of those… who put up security for debts. _{Proverbs 22:7b, 26}

1,000,000,000,000.00 = A Trillion Dollars

Canada’s national debt is now a trillion dollars and steadily climbing! The average individual share on that debt is approximately $37,000 per Canadian. _Source

When government and industry leaders set out to stimulate economic growth by creating jobs so all of us are working and paying taxes and purchasing the ‘new and improved’, and when they create seemingly reasonable interest rates on mortgages, this leaving our nation tethered in trillions, what’s backfired?

Or, has it backfired? Maybe increasing national debt is the goal. I step away from this supposition, as it smells a tad of conspiracy theory. Besides, getting accurate information to substantiate such a smell would be unlikely.

Debt and Health

A number of studies show that severe debt is related to worse health. _Source Suicide rates are soaring right along with bankruptcies. Further, it is expected that when government assistance during this pandemic ends, we’ll see even more deaths and insolvencies as a result of debt stress.

Over 100,000 people per year attempt suicide as a result of debt. _Source

Adults with debt burden were nearly six times more likely to report past-year suicide attempt than adults without debt burden. _Source

Debt is not picky about who it seduces into its deathbed. Consider the Canadian farmer… often viewed as the salt of the earth, nurturing while nurtured by Mother Earth herself. Not only do farmers typically carry a mortgage and vehicle loan(s), but their cost to work the land is enormous. Heavily invested financially into their farming business which also requires vast amounts of elbow grease, all it takes is a summer of unfavourable weather, and their income is slashed.

A 2016 University of Guelph study found that of the 1,100 Canadian farmers polled across the country, “roughly 45% had high levels of stress, and 35% met the criteria for depression”. _Source

So, what might Canada’s national debt have to do with little ol’ me or the farmer whose goal was to provide your next bottle of canola oil or package of quinoa? Here’s what… Canadian taxpayers are expected to service the national debt that increases by a billion dollars daily!

Those who die by suicide are eight times more likely to be in debt. _Source

Sneaky buggers . . . or should I say thieves?

It’s hard to know exactly how many of Canada’s non-permanent residents are racking up debt before bolting back to their homeland, leaving Canadian companies in the lurch _source, but that number is large enough to foster media outcry! Whatever the score, theft and fraud result in an increase in prices, with Canadians picking up the tab.

Is it even possible to get rid of personal debt?

To those who are serious about scrubbing out personal debt, professional resources are a plenty to help make that happen. Free advice and tools are an internet click away. One thing about debt, most everyone is steeped in it whether they admit it or not, so many are freely sharing their stories and advice.

It can take a slice of humble pie to admit that debt is one’s master. Or, perhaps one steps too close to that slippery financial edge and realizes it’s time to take action to restructure one’s monies and debt servicing obligations.

Whatever motivates a change of course, one’s life does become more peaceful and manageable when one is not paralysed by the burden of debt. One’s perspective about what is important, what is a priority, changes.

And, one’s stress and general health improves greatly. Reducing debt improves psychological functioning, cognition, and decision-making. The stress of debt consumes mental bandwidth. _Source

Bandwidth check-up – too many bits?

It is those who have enough but not too much who are the happiest. _{Peace Pilgrim}

Free up mental and emotional bandwidth by reducing debt. Work towards living a debt free life.

This doesn’t mean one doesn’t have a credit card…. it’s nearly impossible to complete a transaction these days without one. This doesn’t mean giving up all the things one loves.

It does mean, however, that one takes a hard look at what one really does love, separating that from all the other bits of stuff. One begins managing better which inevitably leads to more freedom to enjoy the many blessings life has to offer.

Links are included below, many of which are specifically designed as help agents… like this one by a chap who decided enough was enough and it was time to get out of debt. He’s created printable charts to help through the debt reduction process. His is just one of the many plans and aids freely available to those committed to doing a course correction.

The real measure of your wealth is how much you’d be worth if you lost all your money. _Anonymous

My Path to Freedom

I can attest to the fact that being a square peg expected to fit into a round pecuniary hole has been filled with sacrifices, compromises, and successes! I’ve still a ways to go before being able to gift a house to my children—to have a few more years to accrue enough money, I’ve advised my offspring that they’re simply too young to get married!

Here’s what the past few decades have taught me—

Following trends has proven to be a financial killer for some family members and friends. Being able to say NO to the intoxication of buying something new, used, or old takes discipline.

Too many people spend money they earned to buy things they don’t want just to impress people that they don’t like. _{Will Rogers}

Clinging to the visual of how we want our lives to look when life isn’t going well often means spending money not yet earned;

Wealth consists not in having great possessions, but in having few wants. _Epictetus

Hosting garage/online sales, consigning next-to-new purged items, accessing auctions to sell larger things is a cash cow for many;

I love money. I love everything about it. I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gasoline powered turtleneck sweater. And, of course, I bought some dumb stuff, too. _{Steve Martin}

A few dear friends are ever exhausted because of having to stick with their demanding jobs so they can take superb vacations (credit card/line of credit), drive spiffy new autos (financed), and hire people to do work on their mortgaged properties;
Stuff happens in life! Having monies set aside for those rainy days which often come in spades is absolutely necessary in both practical and psychological terms… one panics less about the tomorrows.

If you’ve taken the leap to live debt free, I’d love to hear about it! If you’re considering the debt-free life, I hope the links included herein will be of help and support. Here’s wishing you all things good!

Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery. _{Charles Dickens}