Long after the festivities are over, the credit card statements arrive and many Canadians find themselves dealing with holiday debt.
That debt—and the anxiety that comes with it—can be bad for your health.
Canadians have record levels of debt
Over the past two decades the personal debt of Canadians has increased significantly.
According to Statistics Canada, per person debt doubled between 1982 and 2001, due to dramatic increases in both mortgage and consumer debt.
The effects of financial stress can be devastating.
The Vanier Institute of the Family's 2005 Report on the Current State of Canadian Family Finances, says that "it's time to ring the debt alarm bells",
because financial stress can lead to personal bankruptcy, relationship problems, and mental health problems like depression, or even suicide.
" Often people don't know that they are in financial difficulty until it is too late. "
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Debt stress can be bad for your health
A U.S. study
on credit card debt shows that what the researchers term debt stress—a
measure of worry and anxiety based on the amount of money one owes—can
impact health, over and above the actual amount of credit card debt.
The study is the first to show a link between debt and health.
Warning signs of debt stress
How do you know if your debt–load is approaching levels that could affect your health? Often people don't know that they are in financial difficulty until it is too late.
The non-profit organization Credit Canada has developed a shopping quiz to help you determine if you need credit counselling.
According to Laurie Campbell, Executive Director of Credit Canada, there are six warning signs of debt stress:
- You're only able to make the minimum payment every month.
- You're borrowing from one credit card to pay another.
- You're using credit for everyday expenses such as groceries, because you don't have money in the bank to pay any other way.
- You run out of money a few days before every paycheque.
- You're receiving collection calls.
- You're fighting with your partner or spouse about finances.
What you can do to keep debt under control
To start, sit down and take a good hard look at your expenses and see where you can cut back.
Maybe you need to start taking your lunch to work or taking public transit instead of driving.
Plan to pay off debt on the highest interest credit card first. Then, review the situation on a monthly basis to make sure you're making progress.
If the situation is so severe that you can't manage on your own, contact the non-profit, charitable credit counselling services in your community and speak to a professional counsellor who can review your financial situation and outline your options.
Children can learn how to prevent debt
Teach your children how to spend responsibly by talking about money. Take them grocery shopping with you and let know how much things cost. "Kids are often shocked when they realize that you spend $200-$300 on groceries on a weekly basis depending on how big your family is," notes Campbell.
You can also help them learn about money by starting them on a small allowance and talking to them about how they can save part of it to put towards something they want to do or buy at a future date.
"Let your children know that if you save up for things, you can afford them, and that if you use credit, there's a cost to it," advises Campbell.
"When giving them an allowance, let them know there are expectations about what they're going to do with that money."
For example, kids can split their allowance into three jars to help them see how money can be used for spending, saving and giving to others.
Finally, don't make talking about money a frightening exercise by saying things like, 'We don't have any money.' The object of the lesson, emphasizes Campbell, is to use money as a teaching tool for responsible spending.
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This article was written for The Canadian Health Network by Kristin Jenkins, a Toronto writer and editor who specializes in health and medicine.
