Canadians 'drowning in debt': 47% will borrow to cover costs, survey says

[flamesfever]

Originally Posted by Slava

The quote there that millenials are managing this better is surprising to me. Not because it's millenials, but because some have said that due to their spending habits we avoided recession over the past couple of years. I wish I could remember his exact comments, but one speaker I heard said that all their spending on craft alcohols, lattes and whatever else was easy to make fun of, but also boosted spending by a significant amount.

Reminds me of the old saying:

"If you watch the pennies, the dollars will look after themselves".

As far as avoiding a recession is concerned, the way I see it is that everything is being done to keep it from happening like lowering interest rates and printing money. However, in my experience, the governments can only do so much until the day of reckoning finally arrives.

[stone hands]

Originally Posted by blankall

A flawless plan:

https://www.narcity.com/amp/canadian...-paying-it-off

the part where it says "debt free canadians are most likely to know every dollar and cent going in and out of their bank account" both makes sense and is mind boggling to me at the same time and just shows the mindset difference

theres people out there who DONT know where every dollar they have goes? only 34% of my fellow millennials use a budgeting app?

not knowing where every dollar goes isn't even a thing i could ever conceive of, how do you know if you can afford stuff or be able to pay rent or...anything?

[CliffFletcher]

Originally Posted by blankall

The idea that small amounts of discretionary spending on things like coffees and craft beers is new is total garbage. If anything, it's much harder these days to get the necessary traffic to maintain a small bar or restaurant.

Canadian spending on food and drink outside the home is at its highest levels ever.

https://www.dal.ca/news/2017/12/13/c...a-s-food-.html

[blankall]

Originally Posted by CliffFletcher

Canadian spending on food and drink outside the home is at its highest levels ever.

https://www.dal.ca/news/2017/12/13/c...a-s-food-.html

Firstly, it doesn't break down what kind of Canadians are spending the money. The data largely deals with the "average family of four". How many millenials already have 2 children?

The article is also a secondary source, which IMO is flawed:

Here's the actual report:

https://www.dal.ca/faculty/managemen...ce-report.html

It calls for a 2-4% increase in restaurant spending. I don't see how that equates to eating out more necessarily. The price of restaurants is going up by way more than 2-4% per year.

From the report:

Other food categories have since passed the B line. Meat crossed it in 2012, but increased further in 2014, which may have enticed consumers to reduce their meat consumption. Restaurants, which in 1986 were in the most affordable food category, are now in of the most expensive categories

This forecast means that the annual food expenditure for the average Canadian family is expected to increase by $411 in 2019 to around $12,157 for the year.

The cost of vegetables will continue to be an important factor. With regard to
out-of-home purchases of food, the average family will see an increase of $143, a more modest increase compared to 2018.

The cost of going to a restaurant is increasing dramatically, yet the conclusion is that people are eating out too much? IMO this is an obvious symptom of greater economic troubles. Restaurants are charging more, because the cost of food, labour, property, taxes, etc.. have soared. The actual data from the report shows an increase of food costs of $411, yet only an increase on restaurant expenditures of $143. If anything, that shows that people are eating out less.

[Slava]

^ Consumer spending in the US makes up about 70% of the economy though. Spending is an enormous deal! And as far as millennials go, the eldest millennials are what...38/39 this year? Quite a few millennials have children if they’re going to have them.

I should clarify though, that this isn’t an attack on millennials and their spending habits. It’s just what the data shows. Millennials spend and over the past few years have become the biggest consumers. Because consumer spending is so important, that spending has largely pushed the recession off. You might argue it’s low rates, but you know that just adds to spending, so it’s not much of a different argument.

[jayswin]

Originally Posted by blankall

The idea that small amounts of discretionary spending on things like coffees and craft beers is new is total garbage. If anything, it's much harder these days to get the necessary traffic to maintain a small bar or restaurant.

What Millenials are doing less of is making major purchases like cars and houses. It's pretty baffling that people spend so much energy jumping down Millenials throats for spending $100/month on a few extra luxury items like coffees, but totally ignore the fact that many are not spending $800/month on a new car (payments, insurance, gas, repairs).

IMO we avoided recession by kicking the can down the road with low interest rates.

I have nothing to back this up but anecdotal evidence, so I may very well be wrong, but it seems that millennials are more into monthly car payments than ever. Almost everyone I know has a new or new-ish vehicle leased or financed at $250 minimum a month, and that's before insurance, gas etc. It's almost become standard to build car payments into one's life.

And the lack of house buying is due to the lack of ability to buy houses.

[jayswin]

That Mr.MoneyMustache that someone posted here (amazing read btw) realy drives home how horrible putting money and payments into vehicles is. This is of course provided that you're not able to invest a significant portion of your salary because of said vehicle payments. If you're well off and save/invest a crapload and can still afford new vehicles then have at'r.

But the truth is that's not most people with vehicle payments. Most save/invest next to nothing or even nothing and just feel like a new or newer vehicle on a monthly payment is simply a necessity because society has made us feel that way.

[rubecube]

Originally Posted by jayswin

I have nothing to back this up but anecdotal evidence, so I may very well be wrong, but it seems that millennials are more into monthly car payments than ever. Almost everyone I know has a new or new-ish vehicle leased or financed at $250 minimum a month, and that's before insurance, gas etc. It's almost become standard to build car payments into one's life.

And the lack of house buying is due to the lack of ability to buy houses.

Weird. Among my circle of friends, I'd say the vast majority don't have vehicles and those that do purchased theirs used and outright.

EDIT: That said, I think that's very much a symptom of being Victoria vs. Calgary, as most of my Calgary friends do have vehicles.

[jayswin]

Yeah, definitely Rube, I was going to add that actually, but forgot. Calgary probably skews much higher to owning a vehicle as you almost need one here and we're a total "keep up with the Jones's" city which leads to a $250 monthly payment and minimal saving/investing vs affordable five year old vehicle that does the job.

[btimbit]

Originally Posted by jayswin

That Mr.MoneyMustache that someone posted here (amazing read btw) realy drives home how horrible putting money and payments into vehicles is. This is of course provided that you're not able to invest a significant portion of your salary because of said vehicle payments. If you're well off and save/invest a crapload and can still afford new vehicles then have at'r.

But the truth is that's not most people with vehicle payments. Most save/invest next to nothing or even nothing and just feel like a new or newer vehicle on a monthly payment is simply a necessity because society has made us feel that way.

I recommend everyone here read Mr.MoneyMustache.

If I didn't get paid a daily rate for my truck I absolutely would be driving a 10 year old VW and just use a company truck instead. Vehicle payments are absolutely insane these days

[burn_this_city]

Calgary/Alberta has a similar car culture to California. People here see it as a necessity and buy a lot of vehicles they probably don't need. For the German brands we were 2nd or 3rd in the world for M and AMG car sales during the boom years.

[CliffFletcher]

Most of my friends did not have cars in their 20s. That was in Calgary in the 90s. You don't need a car if you live and work in the inner city or beltline. But when we reached our 30s and it came time to buy a home, we all bought in the burbs, where you pretty much need a car.

Almost every case of "Millennials don't do X anymore" turns out to be Millennials still do X, just at a later age than earlier generations. Getting married, buying a home, buying a car, moving to the 'burbs, having kids. Millennials are following the same trajectory as Gen X and Boomers, they just hit each milestone a few years later.