To live with the prospects of a poor retirement while helping adult children financially survive is a tough slug to the gut as well, and more Canadian baby boomers are getting hit every year, to the tune of almost $3,700 per child.
[Click here to read Part 1,
Part 2,
and Part 3 for some context. You’ll be glad you did and I’ll still be here when you get back. Hey, I’m retired, and waiting for you means I’m not spending money - which is a good thing.]
I recently asked Herald Krimmer, a friend and financial advisor, a few questions about money matters and his answers and comments were interesting, and if I knew in my twenties what I know now about finances I might not be carrying as big a debt load as I am today.
(But, hey, I still think it’s manageable as long as sons David and Paul don’t move back home with their wives and children. Admittedly, my wife would love it but I’d be fretting everyday about who drank my ESB and ate the last slice of pie in the fridge).
While sitting with Herald at a Richmond Row coffee shop I said, “How do some people you deal with get into financial trouble?”
He said, “Some earn, for example, $50,000 per year but spend $60,000. Others earn $100,000 but spend $120,000.”
“What happens to them?” I said.
“I know someone your age (i.e., 60-years old) who will never be mortgage free. His spending went from 120 to $150,000 per year and now rents an apartment while carrying what remains of his last mortgage.”
I asked if fewer people seem to be living within their means today than 10 or 20 years ago and he nodded.
When I asked him for one possible reason he said, “Partly, it’s a sense of entitlement in people. Though many parents today had a working class start, they did relatively or very well compared to their own parents and subsequently wanted their own children to have some of the things they never had.
["My family's working class home: We learned the value of a dollar": photo GAH]
“Some members of the younger generation have been showered with gifts, so to speak, and when they go out to work they find it a bit of a struggle to maintain the lifestyle they’re used to. And instead of spending their money responsibly they run out and buy expensive goods they simply can’t afford.”
Household debt, as a result, has hit an all-time high, while at the same time we see a trend away from company pensions with defined benefits.
People can get therefore into trouble at an early age and stay that way for many years.
Any solutions to the triple whammy?
How about we expect all students to get a high school or university credit re financial basics before they receive easy credit from banks?
Mr. Krimmer liked that idea and we talked about ways of rectifying personal financial matters. I’ll say a few more things about our talk in a future column and let you know when it hits the streets.
Until then:
Reduce spending, pay down debt, and save more money for the tough times ahead.
And to David and Paul: You're always welcome at home.
***
You probably knew that was coming, didn’t you?
.
No comments:
Post a Comment