Household debt could sink a lot of Canadian families

I think we’re heading into an age of austerity but many people didn’t get the memo.

“Household debt in Canada rose to record levels in 2009, with almost two-thirds of families reporting that they would be in financial trouble if their paycheques were just one week late” began a recent newspaper article in a local newspaper.

My eyeballs came to a screeching halt.

People don’t have an emergency stash around the house, say, under the mattress?

Obviously not - for two-thirds of families.


[“Okay, maybe a tad bigger for starters”: photo link]

So, what are people learning in high school these days? Surely folks should be at least learning how to make egg-in-the-hole, darn their socks and then ‘sock away’ a bit of emergency cash, so that a set back doesn’t sink them entirely.

“...Average household debt rose to $96,100 last year (cf $54,200 in 1990). That resulted in a debt-to-income ratio of 145%, the highest ever, with the level set to climb to 160% by 2012.”

My recommendation:

Because “the booming housing market was singled out as a particular area of concern, with record-low interest rates encouraging families to take on more debt than they can afford to buy a property,” levels of government should be strongly encouraging home builders and buyers to move toward smaller homes.

Sure, it means rethinking the American dream, but let's do that.

Less square footage, perks and debt now means families have a better change of owning their home one day rather than it owning them.

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Is your debt-load going north or south?

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