money money money money money money money money money money money money ... uh!
Have you ever seen the 'Consumer National Debt Clock' on a television program? Have you watched the billions climb rapidly in amazement? I am not certain if that image was supposed to disgust me, but it didn't. Instead, it made me feel like I wasn't alone. It almost makes me feel justified about my max-ed out credit cards and humongous interest payments. It's a sickness, and I'm not the only one who suffers.
There are many engines working together that set individuals up for failure. Even the not-for-profit credit counseling agencies, whose ads line the interiors of the Toronto public transit system, are setting you up for failure. They claim to be impartial parties who work for getting you out of debt, but who do you think sits on their boards?
The more I unravel my own sickness when it comes to overspending and debt, the more I peel back the layers of people and institutions who have my financial burden in their favour. And it goes deep.
In 2003, I completed my own business taxes. I had taken a fantastic course through Self-Counsel Press (a Canadian publisher specializing in the creation of small-business legal and accounting forms) and knew the rules around write-offs. I thought that if I sat down and faced the numbers myself, I would get a better handle on my business finances. As I stepped through the process, I realized that my biggest expenses weren't what I thought they were. By far, my highest business expenses came in the areas of professional fees, interest and banking fees.
For example, I moved to Toronto relatively cheaply. In total, I spent $425 (plane ticket, storage, short haul movers, cleaner) to move myself across the country. It was the fees I paid to sell my condo that added up.
My realtor convinced me that the condo would sell faster if I offered a higher commission on the amount over $100k. I wanted to move along the sale so I agreed. The realtor worked with a lawyer and other professionals in my absence. In the end, I sold my condo for $130k (bought for $109k three years prior) and got a cheque for $3500 after all fees were paid out. My initial down payment for the condo was $6,000. Theoretically, I should have got my original $6k + $21k profit minus a few thousand for professional fees. How did I lose $23.5k? It turned out to be one hell of a write-off.
When I compiled all of my financial statements to add up the interest and banking fees I paid every month, I calculated that I spent almost $7,200 for the year. That works out to $600/month; more money than I spent on ‘luxuries’. The only upside was that it provided another excellent write-off.
I didn’t need to buy into retirement savings plans to maximize my tax-return, I was good in that regard. I ended up with the maximum refund, which just went right back to paying down my credit cards anyway.
It's a vicious cycle. I landed in a new city with my savings sapped and a huge amount of debt to juggle. In the subways I saw an ad for a not-for-profit credit counseling agency that read, “Can’t handle your debt? We can help.” I called them right away and made an appointment so I could get everything under control.
I expected credit counseling to – well - counsel me on how to handle my money. Even if they couldn't get to the very root of the problem (that I spend as self-therapy, that I might have a bit of a self-saboteur inside of me, that I have no respect for money and haven't realized the full impact of my bad decisions because I've never had to really take responsibility for them), they might, at the very least, help me set up a budget that I could handle. But addicts like me cannot be cured through these not-for-profit agencies.
They were so nice. Instead of wrestling me down to the ground and yanking my credit cards out of my hand, they helped me justify my bad habits even more. There were solutions. “Bankruptcy isn’t so bad. Everyone is doing it nowadays. It’s almost fashionable.”
What I didn't know until recently is that even the credit counseling agencies have an interest in seeing me bury myself in debt. The people who sit on their boards are CEO's of large financial institutions, insurance agencies and big media. No, they don't want me cured, they want me bandaged temporarily, so I pay them back enough to be able to amass debt again.
They used to jail people that claimed bankruptcy. That is where the stigma comes in. Not anymore, though. Bankruptcy in Canada is a cake walk. Banks have insurance. Trustees are more than willing to help you. It's nothing to be ashamed of. Larry King did it twice.
And when you finish your penance (the period of insolvency, where you pay a portion of your income and liquidate your assets to the trustee to distribute to your creditors), they are there with helping hands again. “Don't worry, child. We'll help you rebuild. In no time, you will have credit cards, mortgages and car loans. We'll have to charge you higher interest, of course, because you are a proven financial risk, but you want it, don't you? You want to be normal, like your neighbours - see that nice shiny new car in their driveway? Wouldn't you like to own that house of your dreams? How about a big screen television? Don’t have the money? Don’t worry. We’ll give you this secured credit card. You hand us $1000 and we'll give you $800 on the card back to spend...with interest.”
And there you are, still sick. Still addicted and they are handing you the tools to destroy yourself once again.
Consumerism is ostensibly vilified, but actually celebrated. Campaigns offer shoe-a-holics a prize for documenting their excess. Points and awards cards reward spending for the sake of spending. All of this justifies us giving into our desires, or what we are told are our desires.
Like the eating-guilt cycle of obesity, the spending-guilt cycle of consumerism is sanctioned entirely by our culture. Excess is celebrated, then denigrated. Purchasing beyond our means fills us with power, then remorse. We live in a world of mixed messages. What do we choose? We choose pleasure, of course. We are human. We are too confused to be strong.
Then do the scrooges of the world have it beat? Make more, spend less, do not let anyone else touch it. They aren't enjoying their money, either. They are miserably misering their millions to their death beds, always afraid that someone is looking over their shoulder to rob them blind. The deep neurosis that shrouds money infects us all.
I don't believe people who say "Money isn't important to me." Money is always important. If you are rich, it's important to maintain your social status or lifestyle. If you are poor, it is important for survival. If you are middle-class, like the majority of North Americans, you are doomed, because you are both enjoying and surviving. You are desperately caught up in the never ending spending-guilt cycle. There are very few cases where people don't care about money, and I haven't met one of them.
The problem is as consumer, we just don't know our rights. We are fed all sorts of bogus information and told that we are powerless to question. The banks have the power, the insurance companies have the power, the loan agencies have the power, our realtors, mortgage companies, lawyers, accountants, trustees and everyone else with a hand in our pocket has the power. We are single consumers and we get what we deserve when we screw up.
I want to tell you that it's not true. You do have rights. There are choices. We just haven’t been given the information to fight back.
What we need are some real consumer advocates - not agencies subsidized by the government, who happens to have a huge interest in our suffering (what do you think our dollar is calculated on? our Gross Domestic Product?). We need someone to make us aware of our rights and to lead us into salvation. Someone who isn't afraid to say, "Tara, you are sick. You need help. You aren't alone, but you have to face it yourself," and hand me tools to heal, not relapse. Then that person will gather all of the recovering infirmed and we'll march on the banks and the insurance companies and the media and the government and we'll make them accountable for being our drug dealers. After that, we’ll take on everyone else who aids and abets the cycle.
We'll tell them to release people from the shackles. Give them back their Social Insurance Numbers (the Canadian version of Social Security Numbers) and only use them for their original legislative intent, not for putting us on a rating scale for credit bureaus to use (consequently, the majority of identity theft comes from information gathered from credit bureaus, car rental agencies, financial institutions and credit departments - not your recycling bin. Anyone can buy your identity on the street corner for $50).
Then they will have to run public education that truly helps people with the consumerism sickness. The content of this education will be checked by a non-partisan, non-affiliated third party source. We will all be educated on how advertising and media and peer pressure and hegemony all work together to convince us that we NEED to buy our kids the latest gadget or we NEED real designer handbags or we NEED fancy new cars. We will be educated on our rights, our choices and our responsibilities.
Then, they will have to pass a law that taxes every institution every single penny they collect from the proliferation of consumerism: buying media, credit card interest charges, exorbitant ‘brand’ mark-ups, etc. Those that collect less (like a small business proprietor) will be exempt. Those that collect more (or charge higher prices to compensate) will be penalized. That money will go back into funding the program to cure the public.
Everyone has the choice, but in the world of haves and have-nots, that choice is increasingly more difficult for the individual. I am not alone, but I should not see that as a sign of justification, I should see that as a sign that things must change. And it is time for real change. We can't continue to feed a gluttonous economy when the result of which is that the big players are the only winners. The change will be made when we are all the winners.
T.
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