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Lately I seem to be encountering many people that have got themselves into a bit of a financial pickle. It's quite scary to see actually. I never want to see someone so stressed about money that it is affecting their daily lives, and I hate to see people ruin their credit with payments in arrears, collections involved, potential foreclosures on houses etc. The really sad thing is that this can all be avoided with some careful attention and planning.

I personally am not immune to a financial crunch. I think all of us at one point or other in our lives go through some level of financial stress. Yet there are some people who are impeccable, problem-free personal money managers. I come across fewer and fewer of people like this these days. I think a lot of it has to do with age and what generation we come from. The older (and maybe wiser?) people are, the fewer I see with financial problems. People who grew up in the depression still remember those tough times. These are the same people that save all their lives, never spend money (just accumulate it), and are terrified of running out of it before they die. I don't believe this opposite end of the spectrum is healthy either. We need to achieve some fiscal middle ground in our lives.

Our society is very "immediate". We, as consumers, want what we want now, and that can translate into using way too much credit. That puts us in the position of having to pay the principal off plus the exorbitant amount of interest that credit card companies charge. As an aside, I am perplexed as to how the credit card companies can still get away with charging 18, 19, 20+%. A part of me would very much like to see these rates come down but maybe they act as a bit of a deterrent to consumers. Maybe not! North Americans are billions of dollars in debt, and high interest rates on credit cards don't seem to deter them.

Careful attention and planning can head off financial disasters. The tried and true adage to save money for a rainy day is 100% accurate. I learned this from recent experience when I had to take my miniature dachshund for emergency back surgery. It cost $3,000 and that kind of money doesn't come out of thin, air believe me (thank you Daddy, your kid and your furkid love you!).

I need to practice more of what I preach. My savings plans (RRSPs, RESP, investment account) now have a rainy day fund added - something I should have started long ago, but didn't. We could all use a rainy day fund because life happens and credit is not always an option. My household is on a credit diet and we are feeling really good about it. More of our society needs to be on a credit diet; I think many a financial crisis could be averted if we were. Alternately, sometimes drastic measures have to be taken. Sometimes the family needs to take on second jobs, sometimes the house has to be sold.

The majority of North Americans need to take the bull by the horns and get their financial houses in order. Canadians are not having the same level of problems as Americans right now, with a crashing housing market and huge sub-prime problems, but it could happen. Maybe not the same type of problem but whatever it is, it could still be a financial disaster to Canadians. I want to avert that in our country and I cannot do it all by myself as much as I would like to save the world.

So, stay within a budget, save for a rainy day. These are simple solutions but are truly the foundation of a healthy fiscal household. Simplicity simply works.