December 19, 2012

A Letter from "Mr. X"

Dear Margaret,

Can you believe it? It’s December 13th and I’m out of money already. I haven’t bought any Christmas presents yet!!!

You should know that I am not a spendthrift. I’m 64 years old and don’t have any consumer debt.

You see, I’ve been struggling with the cost of food and gas. In the last 4 months my budget has been strained because I’m on a limited income and had no opportunity to plan for the increased price of gas, beef, chicken and pork. I buy less and less vegetables, too…only on a daily basis.

The internet and cable costs $158 per month. Hydro is $100 per month. Strata fees are $176 per month. Gas is $50 per month. My mortgage payment is $1,100 per month. Health insurance premium is an additional $128 per month.

And get this -- my cell phone is $130 per month.

I know that anyone with the smallest knowledge about budgeting would laugh at the cell phone and cable costs. But you see the high speed internet connection accounts for $95 and the TV package is just slightly above the bare minimum… TV is my main source of entertainment.

Now, the cell phone enrages me, too. The very basic no frills charge is $50 per month. Then, the connect charge to the internet is $35 …the voice mail features takes it up to $100. 

To avoid incredibly excessive charges for texting – I had to add yet another charge. As my family lives in Ontario, I got the unrestricted calls for Canada… not bad at $10 per month, but the total just creeps up up and up.

I think that internet and cell phone expenses now fit into a similar corporate category as gas companies. We all need them, and they sure know how to profit from our dependency.

I also heard on the television today that the household debt in Canada is continuing to rise. Despite the various warnings from the government. But when you look at the basic costs for housing, utilities, food, gas, medical, the internet, and this is a very short list that does not cover car, house, life insurance, entertainment, vehicle maintenance, clothing, retirement savings, and if you should have children, the cost of raising a child, then it's no wonder the household debts are rising. Oh, by the way, I haven’t mentioned the associated costs of Christmas.

I have two questions for you Margaret. Why can’t the government and other experts realize why the household debt keeps going up? Isn’t it obvious?

Secondly, what do your recommend I do? I’ve had to dip into one of my credit cards already… what do you suggest I say to my family and grand children for Christmas? Do I say, bah humbug. I have no money, so no presents?

Yours sincerely,

Mr. X

Thanks for your correspondence, Mr. X. You present an excellent case for middle and lower income families who constantly struggle with exactly the same expenses as you do. You are quite right. The cost of living has been rising at a much higher rate than family incomes. And, this really explains why the consumer debt levels keep going up. They have been rising each and every year since 1974. We have broken through a made in Canada debt ceiling of $500 billion as reported by the Bank of Canada recently.

What do you do for Christmas? Although it’s a bit late, notify your family that you can only afford presents for the children. Ask them to refrain from buying you anything, or suggest they only get you one gift sponsored by all of your family.

The gifts really are what the children look for at Christmas. Us adults should enjoy spending time together and sharing our memories and wisdom – and show some leadership by staying out of debt – at least for Christmas, or, getting a plan together in the new year to reduce the debt.

Merry Christmas,

Margaret