Have you seen this up and coming credit/banking industry product - Visa debit combo cards?…
August 20, 2013
Margaret H. Johnson
Reports are circulating once again that a crash landing of some type is still written in the stars for real estate values. What is meant by crash landing is that property values will drop 25% perhaps by 2015. This prediction came on Tuesday, July 30, 2013 from Capital Economics.
The great debate continues. A soft landing for Canada’s housing market gets the consensus amongst other analysts.
Either case sends fear up and down the economic food chain, especially for those of us trapped in middle and lower incomes, where our one and only substantial asset is our homes. What would happen if we lost 25% of the equity in our homes?
How are we supposed to react to this kind of news?
Sadly, most of us are unable to do much about it. Our incomes are already spoken for by the never ending upward spiral of household expenses – gas prices have once again kicked the air out of our comfort zone. House taxes in July eat a big hole in the line of credit, too. The summer time spells vacation for families and children, which invariably means dipping into our credit reserves for car repairs, hotels, summer camps, swimming pools and all of the other activities that absorb the cash in our wallets and suck up credit resources like a sponge. August rings the back to school expense bell that is just around the corner. So, we are stuck balancing inflation and taxation with incomes that never catch up.
There is no shortage of advice from the analysts and experts. One told us earlier in the year that if you haven’t paid off your mortgage by the time you are 40 years of age, you are, well, in more polite terms than he said, in big trouble – unable to ever enjoy wealth. Others tell us to pay down the consumer debt and then work away at the mortgage. In other words, get out of debt.
What nobody, and I mean nobody, mentions is the $515 billion outstanding in consumer credit as reported by the Bank of Canada in July 26, 2013. This keeps going up every month and year, not because consumers are out shopping their brains out, but because they are struggling with both monthly expenses and the debt that has been used to make ends meet.
We need to acknowledge the drain upon families that their outstanding debt obligations have on disposable incomes and that we need a decisive response from governments and the financial community. Something that will help people deal effectively with the cost of living and help individuals and families get out of debt.
In the meantime, I strongly suggest that people look at their alternatives to reduce their debt burdens. That is one reason why I am here.