Is debt worth the risk?

It is ironic that we have a government running up billions in debt in a few short years. Ironic because the same government is limiting our ability to borrow for housing by applying rules to reduce the amount of borrowing capacity.

I believe we should lead the way before we criticize our government, but the Boxing Day sales are probably the first chance we get to see that the coming year is going to be no different. 

Each year (and it gets earlier every year), the Boxing Days sales present either year-old products at clear-out prices or products that are marked up sufficiently to allow a Boxing Day sale to not interfere with the bottom line.

Yep, we fall for it every year and black whatever day it is where we are even willing to trample people to death to get the next bargain we can’t afford.

The solution to our limit on how many “deals” we can purchase is to sell us credit. Credit is big business.

Everywhere you go now, whether it is weekly payments to lower the payment number or extended terms (often beyond the usable life of the product), we see forms of credit being marketed to us. Make no joke about it, it is big business.

As the banks pitch the high net worth clients fancy sounding investment opportunities with mediocre returns, you can bet your bottom dollar that if you invest in the scheme a lot of money goes to their credit card clients who gladly thank them with an almost illegal rate of return at close to 30 per cent. 

Yet, just like the government, there is no concern for the consumer… just pay it back later. By then, we will have that corner office, the BMW and a pay cheque to match.

The only problem (almost every time) is when that plan doesn’t work out.

Then, debt is like a disease. It eats away at your very core. It forces you to compromise important decisions. It is no different than any other addiction, and the road to recovery is always long and painful.

If you asked someone who has recovered from significant consumer debt if those purchases were worth it, they will probably tell you “no”. 

Is the government right to make decisions for us? Absolutely not in my mind. At least not until they get their own borrowing house in order and even then, it is nothing that a government should be regulating.

As long as they sell us lottery tickets, why the heck would they be worried about how and why we borrow money? 

In short, the risk of struggling to pay back debt is not worth the benefit of buying a product early.

Take a lesson from your grandparents and save first. The purchase is so much sweeter then.  

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.