Monday, September 26, 2011

Double - Dipping

This article about double dip recession got me a thinkin'.

I want you to think back to 2008 - 2009, and what your life was like then. Think about your debt situation, your assets, everything that happened to you when the recession hit.

Now think about where you are financially and emotionally today. Are you better off now than you were back then? Did you get your consumer debt paid down or off? Have you set aside money for your Emergency Fund in case of a job loss?

The article states that :
Meanwhile, the Canadian household debt-to-income ratio has since risen to a record of 150 per cent as consumers take on more debt and see their incomes squeezed.

That means Canadians owe $1.50 to banks, credit card companies and other lenders for every $1 they earn.

This is absolutely frightening to me. I took a look at our own personal numbers, and I'm pleased to report that we do not fit that statistic. Which likely means that some other couple who fit our demographic has twice that amount of consumer debt.

We were all warned in the last recession to get our financial houses in order to protect ourselves. For the most part, I think we have accomplished that here in our own family. We still have debt that we are paying down, but not at the crushing level it was in 2009. We took the steps necessary to make things better so we could breathe a bit easier. We've paid off about $50,000 of debt since January of 2009, and have built up some assets. We started saving for retirement and our kids education.

By no means are we perfect examples of a family who has completely done the right thing, but I know we are definitely on the right track. Some of us will take longer than others to reach the goal of Debt Free. But we do alright.

If another recession hits soon, I still think we can handle it and beat this monster debt into submission. Others will not have had the foresight to fix the broken pieces of their finances.

How about you? If we are faced with a second recession so soon after the first, will you be able to weather the storms brewing? Have you done what you could to protect yourselves from financial disaster?


  1. This is a great idea to think about. Thanks for the post. I think I am better off. I now I have an emergency fund, I am consistently saving money, I am getting debt paid. Off. The debt I have has all been x-fered to the lowest possible rate I can find. Now I just have to stay here and continue to make progress. I have one more big card to go and hope to do this in the next 2 months. But it is so hard!

  2. This is a great point! When oct. 2008 hit I was still in school and glad not to be graduating that year. So I didn't really feal the impact. If it happend again, I don't know if I would. But I can tell you I think I am in a better place today, money wise.

  3. Geez, that's a terrifying statistic!

    I Think I am better off than I was in 2008, but at the same time, I'm in a much different stage of life. In 2008. Now that I'm part of a double income no kids family, we've been preparing, but not necessarily for another recession.. We've just been trying to get our 'new' financial house in order.

  4. Way to go Eboo, on getting your finances in order. You are doing great and your debt is dropping every month!

    Since Jan 2009 (32 months) we have paid off a total of $33,400 of debt - $7400 was our LOC, and the other $26,000 was the reduction on our mortgage balance.

    We are in way better shape financially now than we were in Jan 2009!
    ~ Makky's Mom

  5. When the last recession hit it really inspired me to increase the amount going towards debt. That meant I was saving less but getting rid of the debt was paramount. In the past year I have paid over $20,000 on my line of credit. It should be completely gone in another 18 months! Yippee!
    My job is safe so I foresee no ill effects from another recession.