Wednesday, December 5, 2012

Dealing with Debt

Well, now for a truly taboo topic.... money and debt. Given the state of world economies, and the fact that everything is connected, it is probably exactly the right time... the micro and the macro and all that.

Money might seem like an unlikely entry on the theme of art-science-spirit, but then again what facets of our lives are truly separate from financial concerns? There is the ascetic concept  of removing oneself from indulgence, but the truth is: unless we are debt-free it is not possible to free ourselves from our material trappings. Authors, from Charles Long ("Living Without a Salary") to Marianne Williamson agree, and are quite forthright on the matter: attaining material freedom and spiritual enlightenment cannot come without also meeting our financial obligations. (Naturally, we also want to avoid succumbing to poverty consciousness, see Julia Cameron and others).


I can tell you from personal experience that debt is no laughing matter. My debts steadily increased from the time I first relied on student loans at age 17, to the crisis point following a divorce in my 30's during which I relied on credit cards for my survival for several years. The low point included every possible survival strategy, from trying to work two jobs, to trying to pawn my jewellery, to relying on payday loans and juggling credit cards - signing up for new ones to help pay for the debts I'd already accumulated. When I finally started taking steps designed to get it under control, I was still too stubborn to get "real" help, instead trying to consolidate my loans through lines of credit and a loan from Citifinancial (please, never do this!). It wasn't until I finally reached the breaking point of going for credit counselling that I realized the error of my ways. The interest charges on all the forms of credit I had maxed out meant that even though I was paying about $1000 a month, my payments were going ONLY TOWARDS INTEREST. My debts were going nowhere! A truly sickening realization, and an experience I truly do not recommend to anyone.

How did I turn it around? I took a leap of faith, quit my low-paying retail job and applied for office work through a temp agency. My first assignment turned into a full-time gig and I have now been with the same company for more than 5 years. Although I wish I had done it much sooner, I also went for credit counselling from an accredited agency. I allowed them to take over my debt payments - I pay them $956 a month, and they pay all of my creditors. Like the ads say: no more harassing phone calls or letters. The agency takes $50 a month as an administration fee, but it was well worth it, at least for the first few years - just to reduce the stress of dealing with everything myself.

I've recently written a letter to the Government of Canada recommending that they consider a tax break for individuals undergoing debt management programs, as it is ridiculously hard to get ahead even now. With about one third of my take-home pay going to debts, my rising income means I also pay more taxes, and don't qualify for relief on things like healthcare. Even when I get a bonus cheque, a huge percentage goes to taxes, making it hard to save enough money for a vacation, let alone home ownership or a car. I often feel like a criminal, "paying for my past." My sins: claiming my "right" to education, years of underemployment, and a divorce. Meanwhile what kind of perks are inmates receiving in prison? I don't like to sound bitter, truly, but the ongoing struggle does wear one down.

In the midst of it all, I have created my website Although I touch on finances briefly in my lifestyle (work and play) section, the website focuses on a wide variety of products and services that create positive change in the world. Natural, organic, fair trade, cruelty-free, eco-friendly.... although I am not getting rich promoting these things, it gives me something to feel good about. On a good month, my website pays for itself, and always gives me something creative and positive to work on.

I would love to hear from some of you about your struggles, and what you are doing to make things better. Let's support one another, share ideas, and create change for ourselves and the world. Onwards and Upwards! And best wishes for a joyous holiday season, and happy new year :)

1 comment:

  1. Great article about debt advice, the key is to remain possitive and think of moving forward solwly. I found this site really useful.