Consequences for Covid - 19?

[73hunter]

If there is one consequence of this mess, I hope it is a more stringent process for consumer credit.

None of us likes to hear about people having trouble to pay their bills, especially if they have kids, and I realize that clamping down on credit would stifle an economic recovery.

With the above said, there needs to be consequences for people that bury themselves in debt and are now needing a handout, and rewards for those that have managed themselves responsibly.

I have no idea yet what that should look like, but it’s food for thought.

[huntervinni]

I get these are very rare and unfortunate times and people and business need help........but it does send the wrong message as well when we bail out everyone. I just had to explain to my kids what the government is doing and how they are helping to pay peoples bills in a nutshell and my son turns to me and says.....so its okay to be in debt cause someone will bail you out.

[JBen]

/devils advocate hat on.

Hunter73.
What do you do for a living?

I mainly worked in “finance”. Everyone using debt, ultimately made my life more rewarding. In short we are a consumer soceity. For the past 50 years, spending has driven our economy. The better it did, the more people working, the more money you made....

I’m “fortunate”. When my company went under I bought a house in the country. My mtg was small. My fiancé was diagnosed with Cancer just months later. Her ability to work has not been the same. She didn’t have benefits. We used a lot of my savings that year.... Due to some other things, over the past 8-10 years. My savings have gone down. A lot.

We still have money in the bank, that a lot of Canadians don’t have. A lot.
Lucky me, even though both of us are now on EI. I could lose me house. Or keep going into savings for more to bridge the difference for 1,2, 5 months. Of coarse that means retirement will probably never happen for sure....

As a soceity, is there way too much debt. Of coarse there is.

Replacing a roof these days cost 5-8 grand. Braces cost 8 grand. So for the have nots, say 60% that don’t get paid $60,000 per year.

Out comes the CC....they don’t have 10, or 30, or 80, or 100k in savings. And I’m pretty sure, most of them, hope they can retire some day.

Life happens.

The roofer. Well he’s probably done ok, thanks to credit.

[trimmer21]

I'm sure most would understand the difference between "good" and "bad" debt. It seems that "bad" debt outpaces "good" debt by a shyte ton. That's what needs to be reversed with 70% of the poplace living pay cheque to pay cheque with only two missed mortgage payments enough to send people to the homeless shelters. Covid-19 may be the straw that breaks the camel's back. I think we're about to learn some very painful lessons,very soon.

[JBen]

I think Canadian household debt is 171%, of income.

Sometimes, when I learn of a persons Credit Card balance I shudder.

But there’s a line or “balance” if you will between that, income, taxes, etc.

Think back just 2 years to the debates around min wage. Good arguments, with the stats to support the the argument, show there are areas where those at the low end who spend everything. The more they have, the more they have to spend. And that’s helps their small local economies. People that bank 50k or 200k...that $ is doing squat for the economy.

Inflation.
Who or what drives that? Well if a bunch of people with disposable income are buying appliances, this, that and the other. Can those without disposable income keep pace. If not, they start using credit.I see so many people these days driving trucks. Feck, I wouldn’t have bought a truck, I think ever. How do they do it..

I suspect the landscape will change when the dust from this settles. Just don’t know how.

As one economist said. We’ve laid off a boat load of “have nots” in one week... everything else could become a sideshow.

[73hunter]

/devils advocate hat on.

Hunter73.
What do you do for a living?

I mainly worked in “finance”. Everyone using debt, ultimately made my life more rewarding. In short we are a consumer soceity. For the past 50 years, spending has driven our economy. The better it did, the more people working, the more money you made....

I’m “fortunate”. When my company went under I bought a house in the country. My mtg was small. My fiancé was diagnosed with Cancer just months later. Her ability to work has not been the same. She didn’t have benefits. We used a lot of my savings that year.... Due to some other things, over the past 8-10 years. My savings have gone down. A lot.

We still have money in the bank, that a lot of Canadians don’t have. A lot.
Lucky me, even though both of us are now on EI. I could lose me house. Or keep going into savings for more to bridge the difference for 1,2, 5 months. Of coarse that means retirement will probably never happen for sure....

As a soceity, is there way too much debt. Of coarse there is.

Replacing a roof these days cost 5-8 grand. Braces cost 8 grand. So for the have nots, say 60% that don’t get paid $60,000 per year.

Out comes the CC....they don’t have 10, or 30, or 80, or 100k in savings. And I’m pretty sure, most of them, hope they can retire some day.

Life happens.

The roofer. Well he’s probably done ok, thanks to credit.

I work in heavy construction. Yes, that has been good steady work for the last 20 years, and has its advantages.

But how one manages their personal finances has much to do with their ability to weather a storm like this. My wife drives an 8 year old minivan, we take vacations in Canada and I don’t mean flying to Vancouver or Whistler. We could afford to do more (and our kids ask why we haven’t been on a Disney cruise YET), but choose not to blow everything we make, and a mindset like that is what I was referring to.