The Perfect Storm
When are we at our most vulnerable to take on unnecessary debt? Probably not when we are at our lowest.
Canadians don’t take on debt after they have lost their job or their income has been drastically reduced; they take on debt when things seem to be turning around.
The ‘new job offer’ is a perfect example. Say you’ve been working for the same company for years making a pretty steady salary. Then you are offered a position at another company, where you will be making close to double your current salary. As soon as that new offer is presented, we as humans, naturally think about what that new salary will afford us. With those thoughts in our mind, we go shopping and buy luxury items we really don’t need. We do have every intention of paying off our debt with our new exaggerated salary, but sometimes, due to financial error our net income is drastically lower than expected. Now, consumed with debt, we’re shackled to our new position. This vicious cycle leads to a life of stress.
Can't Outrun the Storm
My advice: If you take a new job, wait at least a year before you start appreciating your new tax bracket. Try to buy large items with your debit card and include them in your monthly budget.
That promotion was great! Just remember you gotta walk before you can run.
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