Interest rates recently went up again, and are expected to go up again next quarter. Studies show that people are living so tight with their money, that if interest went up 1 full percent, 25% of people would lose their home.
That is a scary thought.
Canadian interest rates recently went up again, and are expected to go up again next quarter. Studies show that people are living so tight with their money, that if interest rates went up 1 full percent, 25% of people would lose their home. That is a scary thought and makes me wonder how close I am to that outcome; how close is my extended family. Will they expect help from me if their personal finances go downhill and if so, what strain will that put on me and my family?
Yesterday I was talking about this and a friend mentioned she was a bank officer in the ’80s when the interest rates went up to 18%. The younger generation (me included) cannot possibly appreciate this, except to be aware and wary that it could happen again. It doesn’t take much in world markets now to affect us. For example, if something bad happens to the economy in China or Japan, it will easily have ripple effects in North American markets and vice-versa.
The problem with people living on the edge of financial disaster will be exacerbated by interest rate increases. But in truth, the problem is not that people don’t earn enough money, the problem is people don’t manage their money properly, including living within their means. Never before has the perceived need to keep up with neighbours been so strong. So long as you can keep your head on, be strong and be your own person, you can avoid the pitfalls of overconsumption and even better, teach your family these same principles.
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