Open letter from
Katharine Schmidt, Executive Director, Canadian Association of Food Banks:
One month ago, a CBC/Environics poll found that37% of Canadians were worried about being able to make ends meet. Thedisturbing developments of the past week in the world's financial markets haveshown that they had good reason to worry.
The Canadian Association of Food Banks is very concerned that the currenteconomic crisis could lead to an increase in hunger and food bank use inCanada. As a national network of charitable food programs, we have reason tobe concerned during a weak economy. Food banks face an increase of people inneed of assistance, combined with a decline in donations of food and funds asindividual and corporate donors are forced to tighten their discretionarybudgets.
We are particularly concerned about two groups in particular: seniors,and working people with a precarious hold on the labour market. Seniors, whomake up a small but significant proportion of people assisted by food banks,may be facing drastic reductions in the value of their nest eggs. Workingpeople face job losses as businesses struggle with slackening demand, and withfinding the credit necessary to maintain their operations.
More than 720,000 people in Canada are assisted by food banks everymonth, and 2.7 million live in households where hunger is a daily anddistressing reality. The past 10 years have seen unprecedented economic healthin Canada overall, with GDP rising and unemployment declining. Nevertheless,food bank use was 8.4% higher in 2007 than it was in 1997.
As it is, downturns in Canada's manufacturing and forestry sectors havekept food banks busy, particularly in hard-hit areas like Windsor, ThunderBay, northern Quebec and western Alberta. According to recently-releasedStatistics Canada data, 247,000 manufacturing jobs were lost between 2004 and2007. In the past year alone, employment in the forestry sector has plummetedby 15%. And hunger is not limited to households in regions that have seeneconomic downturns. Though we hear about the thriving energy and resourcedevelopment sectors in our western provinces, many in the west are being leftbehind. Economic growth has brought with it rising costs of housing, gas,heating oil and food. It is too often the case that those who have moved westto find prosperity quickly discover that their most pressing need is to find afood bank.
After several years of economic growth, it is now crystal clear that arising tide does not lift all boats. On a daily basis, Canadians struggle withhunger. This problem has been plaguing our country for almost three decades.To properly address it, we need federal party leaders to provide visionaryleadership, focused into a realistic, long-term, actionable national povertyreduction strategy. Though it touches many, hunger is too often a problem thatgoes unvoiced. Our leaders must face up to the problem and join the search forsolutions.
(About the Canadian Association of Food Banks: CAFB is a national charitableorganization representing the food bank community across Canada. Over 720,000people access food banks each month - 39% are children. CAFB conductsresearch, engages in public education and advocates for public policy changeto eliminate the causes of hunger in Canada. In 2007, the CAFB acquired andshared 8 million pounds of food industry donations through its National FoodSharing System for hungry Canadians.)
Showing posts with label financial planning. Show all posts
Showing posts with label financial planning. Show all posts
Thursday, October 09, 2008
Wednesday, March 14, 2007
Reduce, Reduce, Reduce -- the three R's and the hemorrhaging bank account
"People first, then money, then things."
This is the catchphrase of a contemporary, famous and female personal finance expert from Chicago.
And it is a catchphrase that reminds us of the importance of priorities.
A catchphrase that needs to be invoked by more and more Canadians -- particularly in the time of uncertain inflationary markets and slowly creeping, but still inticingly low interest rates.
The fact is, Canada is a nation in debt. Put aside governmental spending and we begin to see how detrimental this non-frugal spending spree really is -- and it is to the point where the average Canadian family owes more than it earns.
How do we know this? From statistics gathered on personal debt, interest owed on credit cards and interest paid on mortgage credit.
In 1984:
*Canadians owed roughly $187 billion in personal debt
*We paid $6 billion in consumer credit (typically credit cards and lines of credit)
*We paid $14 billion on mortgage credit
*Total interest on consumer credit and mortgage credit totalled $20.6 billion
In 2004:
*We owe more than $801 billion
*We paid $22 billion on consumer credit
*We paid $34 billion in interest on mortgage credit
*Total interest consumer credit and mortgage credit was set at $56.6 billion
Source: Statistics Canada
What's worse is that we cannot pay for our high-cost living! Personal bankruptcies are near record highs. The result of this spend now pay later philosophy is that by 2003, for the first time ever, the average Canadian household owed more than its annual take-home pay.
The fact is, we have seemed to have lost the discipline of buy only what you can afford. The discipline of planning for a rainy day has disappeared and the desire for gear, gadgets and big ticket items has replaced responsible spending.
In a Maclean's article last year, senior economist at CIBC World Markets Toronto, Benjamin Tal explains that "As a society we have become addicted to low interest rates. That means as consumers we're much more vulnerable to an economic shock, like a sudden rise in interest rates, a recession or a job loss. Many of us are now living paycheque to paycheque."
Now back to Orman's powerful catchphrase: People first, then money, then things.
It appears the paraphernalia is clouding our perspective.
In an interview with the New York Times, Orman explains that anyone can save money but because of their psychological hang ups they don't. Orman uses the stereotype of women as "birdbrains" when it comes to saving. She explains that women are very good at saving their money, but because of their psychological hang-ups, they give away their money to friends and family to the extent of harming themselves financially. Orman elaborates on this idea in another interview with NBC where she explains why she focuses on the psychological aspects of financial management (in her recent book). "I had to get into the minds and souls and hearts of women to say, 'Ladies, do you understand it? We're voluntarily committing financial suicide.'"
To be truthful our entire society is committing voluntary financial suicide; we are hemorraging at the bank, through the line of credit and bleeding from the credit cards and it is time to stop.
In order to lead a responsible life, one must, at some point, come to terms with the undeniable fact that gear and goods will not make us happy. While a new car, new washing machine or a new pair of shoes may elicit a temporary high, the only way to gain personal, inner and lasting satisfaction is through a disciplined and purposeful lifestyle -- a lifestyle that includes an acceptance that material goods are only one, surface aspect of life.
As such, and going into the Spring sales, we need to commit, as a nation, to examine our spending habits. In the reduce, reuse and recycle mantra the most mantra of the new religion (environmentalism) is reduce -- and that requires self awareness and commitment.
This is the catchphrase of a contemporary, famous and female personal finance expert from Chicago.
And it is a catchphrase that reminds us of the importance of priorities.
A catchphrase that needs to be invoked by more and more Canadians -- particularly in the time of uncertain inflationary markets and slowly creeping, but still inticingly low interest rates.
The fact is, Canada is a nation in debt. Put aside governmental spending and we begin to see how detrimental this non-frugal spending spree really is -- and it is to the point where the average Canadian family owes more than it earns.
How do we know this? From statistics gathered on personal debt, interest owed on credit cards and interest paid on mortgage credit.
In 1984:
*Canadians owed roughly $187 billion in personal debt
*We paid $6 billion in consumer credit (typically credit cards and lines of credit)
*We paid $14 billion on mortgage credit
*Total interest on consumer credit and mortgage credit totalled $20.6 billion
In 2004:
*We owe more than $801 billion
*We paid $22 billion on consumer credit
*We paid $34 billion in interest on mortgage credit
*Total interest consumer credit and mortgage credit was set at $56.6 billion
Source: Statistics Canada
What's worse is that we cannot pay for our high-cost living! Personal bankruptcies are near record highs. The result of this spend now pay later philosophy is that by 2003, for the first time ever, the average Canadian household owed more than its annual take-home pay.
The fact is, we have seemed to have lost the discipline of buy only what you can afford. The discipline of planning for a rainy day has disappeared and the desire for gear, gadgets and big ticket items has replaced responsible spending.
In a Maclean's article last year, senior economist at CIBC World Markets Toronto, Benjamin Tal explains that "As a society we have become addicted to low interest rates. That means as consumers we're much more vulnerable to an economic shock, like a sudden rise in interest rates, a recession or a job loss. Many of us are now living paycheque to paycheque."
Now back to Orman's powerful catchphrase: People first, then money, then things.
It appears the paraphernalia is clouding our perspective.
In an interview with the New York Times, Orman explains that anyone can save money but because of their psychological hang ups they don't. Orman uses the stereotype of women as "birdbrains" when it comes to saving. She explains that women are very good at saving their money, but because of their psychological hang-ups, they give away their money to friends and family to the extent of harming themselves financially. Orman elaborates on this idea in another interview with NBC where she explains why she focuses on the psychological aspects of financial management (in her recent book). "I had to get into the minds and souls and hearts of women to say, 'Ladies, do you understand it? We're voluntarily committing financial suicide.'"
To be truthful our entire society is committing voluntary financial suicide; we are hemorraging at the bank, through the line of credit and bleeding from the credit cards and it is time to stop.
In order to lead a responsible life, one must, at some point, come to terms with the undeniable fact that gear and goods will not make us happy. While a new car, new washing machine or a new pair of shoes may elicit a temporary high, the only way to gain personal, inner and lasting satisfaction is through a disciplined and purposeful lifestyle -- a lifestyle that includes an acceptance that material goods are only one, surface aspect of life.
As such, and going into the Spring sales, we need to commit, as a nation, to examine our spending habits. In the reduce, reuse and recycle mantra the most mantra of the new religion (environmentalism) is reduce -- and that requires self awareness and commitment.
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