One of the most overlooked aspects of why we have so much debt is our desire to have the suburban lifestyle with two or more cars.
With urban sprawl we have created a situation where we need to drive to conduct our daily activities. A recent Stats Can report indicated that in Canada we spend 18 per cent of our disposable income just on transportation and a further 30 per cent on housing that usually exceeds our physical (size) needs.
What if we lived in more compact communities with higher density, had more affordable transportation, and lived in domiciles that match the size of our families and dependents and needs.
This is the norm in Europe and Asia where they spend much less on moving goods, services and people.
The International Association of Public Transport indicates that in European and Asian counties five to eight per cent of GDP is spent on transportation, we spend 13 per cent in North America.
A new Statistics Canada report released Dec. 13 shows Canadians keep taking on more debt even as they get poorer.
Average household debt in Canada hit a new record high of almost 153 per cent of disposable income in the third quarter, a sizable jump from 150.7 per cent the previous quarter, the agency reported.
As well, household net worth declined by 2.1 per cent to $180,100 from $184,700, the sharpest drop in almost three years as the value of pensions and stock investments declined.
The report came a day after Bank of Canada governor Mark Carney again warned about the dangers of household debt poses to the economy going forward.
Canadians are more indebted now than the Americans and British, Carney noted, saying that they need to move to bring debt accumulation in line with income growth, which is modest. Debt rose at about twice the pace of income during the last quarter.
We can improve our economic and physical health by creating more compact walkable communities. The choice is ours.