July 23, 2013

By Margaret H. Johnson

My eyes opened up wide when I heard on the Lang O’Leary show yesterday that 33% of all Canadians are living from paycheck to paycheck according to a survey conducted by the Certified General Accountants Association of Canada. I would say that living from paycheque to paycheque is a loud resounding danger signal that you are either broke or short of money – and probably have maxed out your credit lines and credit cards.

Living from payday to payday has quite a history. It really all began before the credit card and credit lines. It reminds me of the days when the only credit reserve most people had was overdraft protection on their bank accounts. It was also the golden days for the NSF cheque – when you ran out of cash you ended up bouncing cheques. Today, you are usually denied the transaction at the point of sale terminal. This is that one embarrassing moment that everyone fears the most.

By the way, the line of credit may be traced back to overdraft protection. It evolved from the 1970s to being a resource that rivals credit cards and may substitute as a house mortgage.

In the past, an NSF cheque seriously challenged a person’s integrity. It could, under certain circumstances, even be considered fraudulent. Living from payday to payday back in the 1960s and early 70s, however, did not signify a slumbering debt problem. It simply meant you basically didn’t spend more than you brought home. By today’s standards you would be considered in great financial shape – no debt. Can we imagine such a financial condition today? We might even want to ask, “What is wrong with living from payday to payday if you have no debt?” But that question and those days are long gone. They even precede statistics about bankruptcies.

Today, living from paycheque to paycheque is more troublesome than in the past. It means that people have probably exhausted all of their conventional credit resources. And, in today’s world that could be quite a sophisticated list of credit cards and credit lines.

However, the current consumer debt levels excluding mortgages, as reported by the Bank of Canada, is up to a new high of $514 billion (May 2013) which sheds light on the underlying realities of 33% or more of Canadian families. They not just owe a lot of money, they can’t get out of debt.

The CGA survey confirmed that the biggest reasons for not being able to accumulate wealth were current income levels and having to honour other financial obligations.

This is something that I know a little about and invite all who are living in the very real state of desperation – from payday to payday to email me or give my office a call. This is the time to reclaim your financial future.

Remember, if you are experiencing financial difficulties do not wait. Call Solutions Credit Counselling at 1(877)588-9491 or fill out our Debt Consolidation Questionnaire and get your Free Credit Counselling Advice today.

For more information visit Debt Canada - your Canadian credit education centre.

If you are a woman in debt, speak with Women and Money first. We specialize in helping women with their personal and business financeMoney management advice you can count on!

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