CAUTIONARY TALE: What is your household debt?

CAUTIONARY TALE: What is your household debt?

“You must gain control over your money or the lack of it will forever control you.” ― Dave Ramsey

Canadians are avoiding a record high household debt SOLELY due to the increased home values seen across many parts of Canada. Stats Canada reports that for every $1.00 of disposable income, Canadian households possess $1.65 in total household credit market debt. What is household credit market debt? This type of debt includes consumer credit (all types of credit cards including stores), mortgage and non-mortgage loans. It really means that many of us are adding to our debt to maintain a standard of living that is simply not aligned with our earning ability.
What has changed? For many Canadians, we are buying into the notion that our credit cards REWARD us for our thrifty actions. A lot of consumers use credit cards like debit cards – whether it is to buy a coffee at Tim Horton’s or groceries. If we use our credit cards, we earn “reward points” that can be used for things that we often want (but likely don’t need). What most people don’t realize is that UNLESS you diligently pay off your credit card in full each month, the potential “reward” from using your credit card is overshadowed by the excessive interest charges that continue to accrue. Credit card companies market a lifestyle to consumers that is false and can be dangerous to your finances and relationships.

With interest rates remaining at record low levels, a strong real estate market increasing the potential value of your home, home owners are more comfortable taking on increased debt. As we saw a few years ago when North America fell into a recession, by the time that consumers address their debt, it can often be too late to realize that there is not a cushion to absorb the impact of an economic downturn.  Can you benefit from the lower interest rates and stronger real estate market? Absolutely. For investors, they are looking at a longer term performance for their investments so they are locking into 5 or 10 year mortgages so that they can ride any economic wave that might arise, and realize that rental properties are in demand with the higher housing costs. Home owners can really benefit from these type of market conditions. With lower mortgage payments (due to interest rates), they can use the extra money they would have paid towards their home and use it to pay down their credit cards or other consumer debt. Another option is to pay the same amount as you would have normally paid when interest rates were higher and overpay your mortgage. This can shave years off a mortgage without any extra effort!

Life happens, and we can’t predict those curveballs that seem to come our way. Many people react negatively towards their spouse or partner when a job loss, bankruptcy or lower than anticipated real estate return occurs. Experts agree that the best way to deal with these high stress situations is to address the PROBLEM, rather than ATTACK each other. According to Gary Neuman, author of “In Good Times and Bad”, he states “..the most important step in managing life’s struggles as a couple is to decide that you will focus on the struggle as a team, not as two individuals ready to blame each other”.

A very insightful (and simple) exercise that Mr. Neumand suggests everyone complete is called “The Meaning of Money”. Simply answer this one question – “What does money mean to you?” Common answers include: control, power & strength, being able to care for others, fun, social acceptance, health, diversion from other issues, feeling better than others, safety and being right. If someone considers money to mean safety and security, then they are more apt to buy a home within their means and probably pay it off as soon as possible, thereby fulfilling their need for safety and security. However, if someone views money as representing success, then they might be more inclined to purchase an executive home with higher-end finishings and feel that it is better to pay a little more for a home that they truly feel represents their tastes and accomplishments. I know that my wife and I have built a home that we designed, and enjoy entertaining clients and friends in our own home. For me, our home represents calm and peace.


Best Regards,

Brian McCullough, Myles McCullough & Kiel Lukaniuk


SELLING? If you are interested in selling your home or property, please feel free to contact us to get a FREE market evaluation of your home and learn the current value of it in today’s market. This is completely at NO COST to you and you are under NO OBLIGATION to list your home. However, like any investment, it is wise to know the value of your home so that you can make informed decisions when making any changes to your investment plan or portfolio.


BUYING? If you are interested in buying or investing in real estate, view some of our featured listings on my website at Feel free to call McCullough Marketing anytime at 250-751-1223. We look forward to hearing from you.


McCullough Marketing is dedicated to assisting our clients and providing professional advice and guidance throughout each step in the real estate process. Don’t forget to “LIKE” us on Facebook. Here is an easy link to our McCullough Marketing Facebook page:


If you would like a FREE, No Obligation Current Market Evaluation of your home or property, please contact our McCullough Team at 250-751-1223. View all of our listings and projects at

Related posts

Make sure you know how deep the water is before you dive

Make sure you know how deep the water is before you dive   Picture by Bryan Evans At...

Continue reading

What happened to our justice system

Photo by Amber Kipp Well, for many of us or at least myself, it appears that our justice system...

Continue reading

Grief is the price you pay for having love

Grief is the price you pay for having love. Queen Elizabeth II Last week we lost someone who...

Continue reading