O God, I beg two favors from you;
let me have them before I die.
First, help me never to tell a lie.
Second, give me neither poverty nor riches!
Give me just enough to satisfy my needs.
For if I grow rich, I may deny you and say, “Who is the LORD?”
And if I am too poor, I may steal and thus insult God’s holy name. Proverbs 30:7-9
Hettie Ruth Wallace was born in 1916 and raised in the town of Maple Creek, Saskatchewan. Maple Creek is a “one grain-elevator town” on the Canadian prairie almost exactly half way between Calgary and Regina. Then, as now, the main industry was agriculture.
Although not a licensed doctor, Hettie’s father had a smattering of medical education and in addition to his homestead on the edge of town he acted as somewhat of a local healer. In the winter of 1931-32, at the height of the depression, Maple Creek fell under the grips of a major flu epidemic. The nearly destitute “Doc” Wallace worked around the clock as one by one his neighbours fell ill and died. By mid-winter his own wife would be among the dead and devastated by the loss and exhausted from the constant demands of a sick population Wallace himself would fall ill and die before Easter, 1932.
A few weeks later, as spring was returning to the prairie sixteen year old Hettie boarded a train east to live with her cousins in Toronto. During the five day journey, surrounded by the desperate and destitute forced “ride the rails” in an effort to find work Hettie made a vow, NEVER to be a burden to anyone.
She got a job and started to pay her own way right from the start. Every week, after the groceries were purchased and rent paid every penny left over was put away. She married Fred Britton, a tool and die maker from the smoke stack community of Oshawa, Ontario in 1938 and continued to squirrel away money, even just one or two dollars at a time, for the next 70 years. She raised two daughters, was blessed with seven grandchildren and five great-grandchildren. Other than a mortgage that was guaranteed by Fred’s WWII veteran’s pension, they never carried any debt.
Hettie and Fred were a perfect embodiment of the Protestant work ethic. Work hard, spend less than you make, and do if for a really long time and you will amass a fortune that is the envy of most of the world. The generation that defeated Hitler taught us these things and ushered in the longest and largest economic expansion in history. For two decades from 1953 to 1973 the western economy grew an average of 5% percent per year, with the average household income more than doubling in that time period. But as this generation started to retire and live off their hard earned savings something changed.
As Daniel Bell put it 1976, “The Protestant ethic was undermined not by modernism but by capitalism itself. The greatest single engine in the destruction of the Protestant ethic was the invention of the instalment plan, or instant credit.” (The Cultural Contradictions of Capitalism).
Somewhere around the middle of this expansion corporations realized that people were sitting on a lot of money and in order for the expansion to continue they had to start spending it. One of the most effective ways to get people to spend money is to convince them that they have even more – the solution was credit. Buy now, pay later. Why? Because you deserve it and you’re going to make the money eventually anyway.
Thirty years after Bell made that observation the result, according to a recent issue of Maclean’s Magazine, is that the average Canadian home is now carrying unsecured debt equivalent to 140% of their annual income. Put another way, if you make $80,000 per year, you owe $112,000 on credit cards. The average rate of interest on unsecured debt is 16% with minimum payments roughly the equivalent of amortizing the principle over 5 years. That means if you stop using your cards today and paid only the minimum balance it would take a grand total of 386 months (just over 32 years) to completely eliminate your debt. Most people would likely accelerate their payments as things got easier but if we all decided to do this the economy would grind to a halt, throwing millions out of work and exacerbating the problem beyond imagination.
Having hitched our wagon to the train of easy credit can we ever go back? I don’t have the answer to that but what I do know is that we can’t continue down this path. If we all just asked a few questions before we made a purchase it could make all the difference in the world.
“Will I still be paying for this after I’m finished using it?”
“Will it become obsolete before I’m finished paying for it?”
“Will I end up owing more than I make?”
If the answer to any of these questions is yes – you can’t afford it and if you still want to purchase the item you better save up your money first.
So here is my modest pledge; In the spirit of Hettie and Fred Britton I promise to stop spending more than I make and hope you will to….
Hettie Ruth Britton (nee. Wallace) died in early September 2008 at the age of 92 – completely free of debt. Fred Britton, 94 years young, continues to live a productive and financially secure life 29 years after retirement, just blocks from the home he shared with Hettie for over 60 years.
Happy Valentine’s Day Grandpa! – thanks for the legacy.