Will Rogers famously said that "there's lies, damn lies and statistics" - suggesting, we suppose, that statistics can be found to prove just about any point. But sometimes statistics don't lie or even deceive - sometimes they go right to the heart of an issue and serve as something of a benchmark that should make us all stand up and take notice.
Such is the case with this week with a report from the Ottawa-based think tank Vanier Institute of the Family, released on Thursday (Feb. 17). It shows that the average family debt in Canada has hit six figures for the first time. As well, the report found that Canada's debt-to-income ratio is now about even with that of the United States, which is supposedly in worse financial shape than is Canada. In fact, when it comes to personal debt, it seems all North Americans are standing on ground of equally questionable - read, shaky - stability.
"There is still this sense that we are a more frugal nation and that's simply not the case," Katherine Scott, the institute's director of programs and research, said in an article in the Vancouver Sun. "It was the case 20 years ago, but it's certainly not anymore."
One of the biggest problems is that people are saddling themselves with larger and larger mortgages, leaving little money for family vacations, car payments, or contributions to RRSPs or RESPs. Lured by low interest rates, a desire to keep up with the family down the street and the notion that - as one Canadian financial institution advertises - "you're richer than you think," our average debt-to-income ratio is now 150 per cent. That means that for every $1,000 in after-tax income they make, Canadian families owe $1,500. That's scary, and especially so considering that the statistic includes many who have their financial houses in order.
We expect governments to manage our money responsibly -and by and large, in Canada at least, they've managed to get a handle on government finances over the past two decades (experts say current budget deficits in both Victoria and Ottawa will disappear in the next few years if the economy continues on the road to recovery). But family finances can only be handled one family at a time - and for many of us, the bottom line should be, "Don't spend money you don't have unless it's a high priority and you have a plan for paying it off."
Anecdotally, we think there's a broad enough range of stories of family financial struggle and triumph in Squamish to make our community a good candidate for that TV show regarding finances that's being pitched by the producers of the show "Village on a Diet." Certainly not all of us need to go on a budgetary diet, but for many, a bit of belt-tightening under expert supervision could be just what the doctor ordered.
- David Burke
