Recently, after reading that six-of-ten baby boomers (yup, that’s me!) are supporting their children to the tune of over $3,600 per year, I realized I couldn’t afford to do that, and started thinking about my debt load.
[Click here to read Part 1 for some context.]
Yes, and your debt load too.
I know my debt is big (from a substantial home renovation), but I think it’s still manageable. Unless the kids move back home - with their kids. Then I’m in trouble, enough so to send chills down my spine while just thinking about it.
Not only are the children of many boomers in financial trouble. So are Canadians in general.
[Click here to read Part 2 for some context.]
Peter Zimonjic, Sun Media, reported the following about a month ago:
Don Drummond, chief economist for the TD Bank, says Canadian (and American) households are saving about 4% of their income, which should leave enough cash for some consumer spending, but not much.
That means any economic recovery will be lethargic, household debt levels will continue to climb and retirement savings will lag behind.
If I recall correctly, low cash, high debt and poor savings are known in economic circles as the triple whammy and anyone who gets caught up in its grip would likely benefit from sound financial advice.
My simplistic (though brilliant and oft-repeated) slogan, i.e., “reduce spending, pay down debt and save money for tough times ahead” isn’t likely enough advice to help anyone but me navigate these troubled economic times, so I recently sat down with friend, fellow hockey player and financial advisor Herald Krimmer to discuss money matters, sip coffee and collect information for a future article.
(Herald K., HBA CFP CLU ChFC
580 Waterloo St, 2nd Flr
London, ON N6B 2P9
PH: (519) 660-6798)
About his role he said, “I help people invest their money wisely as well as help them manage their affairs.”
And about the current times he added, “Many people leave careful financial planning too late and have a habit of spending more, sometimes considerably more each year, than they earn.”
He mentioned that there are many whose poor habits will lead to bankruptcy if not brought under control.
Last I heard, Canadians' household debt is about 140 per cent of disposable income and rising, which is lower than Britain (about 150 per cent) and the US (almost 170 per cent) but significantly higher than countries that use the euro (about 90 per cent).
Also, the number of personal bankruptcies is rising and anyone who thinks they can maintain a reasonable lifestyle solely by depending on the Canadian Pension Plan is living in a dream world.
I asked Herald what he says to people in regard to planning for the future.
His comments were enlightening.
***
How are you coping with the triple whammy?
Click here to read part 4 and conclusion.
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