The So-Called American Dream Or Fiasco?
The So-Called American Dream Or Fiasco?

I just finished watching “‘Til Debt Do Us Apart”. I don’t know what it is about this show, but I am always fascinated to learn how other people manage or mismanage their finances. I find it more amazing to see the shock in the participants’ face when they hear how much they over spend and how they damage their finances. Really? Do they ever balance their books? Do they ever check their credit? Have they ever heard about having a budget?

I guess my husband is right and I must be weird, because I do this all the time.

I don’t blame the participant though; I blame the system and culture we live in.

I come from a country where using borrowed money is out of the question because of how expensive it is (i.e. interest rates are crazy high). Because of this, the culture is to transact in cash.

I believe that getting in debt is a common phenomenon when we arrive in Canada. Suddenly we have tons of money available through credit. We get pre-approved credit cards constantly and applying for credit is easier than we ever knew.

The problem is that we don’t understand credit and treat it as available cash. We have yet not learned what credit is and how to use it.  We live a life with all toys and comfort but we forget that it is all borrowed money. It is not our reality, but we certainly believe it is.

The problem is that when we are ready to take control of our future by buying our home we find that our debts make it impossible for us to qualify for a mortgage. Our debt ratios are out of control and lenders simply stop believing in our ability to manage our finances.

It is important for each of us to understand credit and use it wisely. We must learn to prioritize and … here comes the dreaded fact… live within our means. Prioritizing is key. Having a budget for those priorities is even more important.

I have seen people who cannot qualify for a mortgage because they did not pay their cell phone bill or other small debts. They allowed these small commitments to ruin their financial profile with creditors for truly small dollar amounts.

We need to take the time to understand credit and how it affects us. Credit is not bad, but we do need to use it wisely… and in our favour.

Regularly get a credit report from TransCanada or Equityfax to learn where you stand today. Speak to a financial advisor, mortgage broker or credit specialist to understand your situation today and take control of your future.

Contact us to discuss your current financial situation. We are here to help.

Please share your comments or ideas on how to better manage your budget in the comments section below.

Until next time,

Thaily Toral-Garcia

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