The article I posted yesterday revealed that the average Canadian now has a debt-to-income ratio of almost 1.5.

When I stand up on my soap-box at Yonge & Dundas Square every Tuesday & Thursday at 3:17PM, one of the things I rant about the most is how much unnecessary spending goes on in today’s culture.

I’d like to start this rant by talking about the perfect example of glorified overspending: Bottle Service.

There’s a term in our society, and I apologize in advance if you have sensitive ears; to put it bluntly, it’s called “F*ck You Money.”

This refers to money that stems from somebody that is so rich that they don’t even feel the effects of spending it.

When you have so much money that it loses all value, and you can spend whatever you like, whenever you like, it’s called “F*ck you money.”  It means you can buy and sell people and just tell them where to go…

For these people, my following example of bottle service simply won’t apply.

But in my experience, the people getting bottle service at night-clubs are the working class who “let their hair down on weekends,” and end up being the part of Canada whose debt-to-income ratio is over 1.5.

Bottle service is the single most moronic way that you can spend your money in Toronto’s world of “entertainment.”  You heard it here first, folks!

If I wanted to feel “special,” I would get a dog and have him bring me my slippers every evening.  I would NOT go to a nightclub and order bottle service just to feel important.

Let’s examine the cost…

Say an average vodka-soda costs $6.00 at the bar.  You can drink all night for $6.00 per drink.  (bear in mind that I’m not cheap – I just refuse to frivolously overspend)

Now say you purchase a bottle in your all-important “private booth” which isn’t that private, makes it difficult to access the bathrooms and exits, and is cramped beyond belief, and let’s start counting…

The bottle costs $220, but that doesn’t include tax and tip.  I find it ironic that they can charge tax on the bottle, but I guess it’s now “a service” because it has the word “service” tagged on to the word “bottle.”

People routinely pay $300 for a bottle and it contains 26 ounces of alcohol – or 26 drinks.

Now, if you’re pouring your own drinks all night, you’re likely going to spill 3-4 ounces just from being a drunken moron.  So let’s call it 23 ounces now.

Also, consider that the people at your table will pour a few drinks for buddies or do shots with the neighbouring morons at the adjoining tables.  So let’s call it 20 ounces now.

Now consider that by pouring your own drinks all night, you’re basically drinking 1.5 times as much with each drink as you would get at the bar, but you don’t really acknowledge the effects.  So let’s call it 14 ounces now.

And finally, this happens:

That’s right – you know what I’m talking about.

As soon as the bottle hits the table, the scavengers show up.

“Oh, hiiiii.  My name is Tegan, and this is Cassandra, Emily, and Ryder.  Mind if we join you?”

Of course not!  Why would we mind?  Four amazingly hot girls just showed up out of nowhere and sat down in our booth!  Oh-em-gee, OMG!  Here – let me pour you ladies all a drink!  Make it a double?

So let’s call it 6 ounces now…

So out of that entire bottle that you paid $300 for, you and your friends likely got 1-2 drinks each.

You’re basically paying $30 – $50 per drink when you could be getting them at the bar for $6.00 a piece.

YES, I know that this is an extreme exaggeration.  But is it really?  How many people do this every single weekend?

Again – the people that have “f*ck you money” don’t feel the effects.  But legions of 20 and 30-somethings head out in Toronto, Montreal, Vancouver, Calgary, and perhaps even North Bay and do this every Friday and Saturday night.

A few years back, I went to a birthday party for my friend Marco at whatever nightclub happened to be hot for that three-month period.  I had an amazing time, spent some money, and partied with my good buddy Jeff at the bar. 

At the end of the night, Marco’s friend, George, who was 22-years-old and dropped out of university to work at GNC during the day and as a bouncer at Musik at night, approached me with a leather bill-fold and asked, “Yo!  You gonna throw on this?”

Apparently, George had racked up a $2,300 tab while “having a good time.”

I’m sorry, but spending $2,300 at 22-years-old goes well beyond having a good time.  I should also mention that this guy sank every penny he had in the world into buying a Mercedes that he couldn’t afford.

I felt bad in telling George that while I also had a great time, I “only” spent maybe $120 at the bar with my buddy Jeff, and I didn’t participate in the genitalia-measuring competition that he and his friends had engaged in by seeing who could spend the most money on $300 bottles.

Our society in 2010 has become nothing more than a contest to see who can spend the most money – money that they don’t have.

But perhaps the larger problem is that many people don’t understand money!  And it goes without saying that they certainly don’t understand credit.

A friend of mine, God bless his sweet, tender soul, is a starving musician – the kind of happy-go-lucky lad that believes our government should subsidize his life so that he can share his “art” with the world.

When we were younger, we played roller-hockey together and he was our goaltender.  While shopping for equipment one day, he produced his very first credit card!  Yay!  Our little boy’s all grown up!  He bought a pair of goalie pads for $199 plus tax, and never looked back.

Well, he looked back a few years later when he told me that his credit card was “maxed out” at $500 and he couldn’t understand how it happened so fast!  He told me that in those few years, he had NEVER made a single payment on his credit card because “It was just too easy not to.”

I asked him what he did with all the credit card statements that were mailed to him and he said, “I just kinda threw them in a pile on the floor and eventually I tossed them out.”

The 29% interest, compounded monthly, had turned his $228.85 purchase into a $500 debt that only continued to grow.

If you think this is an isolated example of people that don’t understand debt, think again!

My favourite example of this, and if you’ve read this on my blog – simply keep reading, is found in the movie Maxed Out.  I wrote an entire blog post about this movie HERE.

The saddest feature of this documentary film comes when the filmmaker heads down to Mississippi to discuss mounting credit woes with a poor, uneducated woman.

The filmmaker opens up a “Special Offer” that had been mailed to the Mississippi resident by a lending institution, offering a $5,000 cash advance that she could pay back with as little as $5.00 per month.  The filmmaker explains to her that this would end up costing her hundreds of thousands of dollars over the long run, and she replies, “Yeah……but I’d have five-thousand-daallas in mah pawket, nah wouldn’t I?”

With people like this living in our society, it’s no wonder the debt-to-income ratios are climbing.

But what about the educated, intelligent, middle-class who do understand credit?  Why are they continuing to spend beyond their means?

Well, I believe this goes back to the first day of economics class when we were told about “wants versus needs.”

Our society continues to confuse these two terms, and the personal consumption climbs and climbs…

For example, in 1985 my father bought me the Nintendo gaming system.  I used this gaming system for SEVEN years before Super Nintendo came out in 1992.  It wasn’t for another FOUR years that Nintendo:64 hit the market.

In today’s society, there is a new video game console available for purchase every single year.  Parents (via their kids) don’t know how to delay gratification for seven years like we did in the 1980’s, and thus a new system is purchased for young Billy.

Perhaps parents are too afraid of saying “no” to their kids these days.  I have some advice for parents: when you tell Billy that you won’t buy him the new game console that plugs directly into his brain, and he fires back, “Well Bobby’s parents bought it for him,” just tell him, “Well that’s because Bobby’s parents love him more than your mother and I love you!”  He’ll see the sarcasm – don’t worry.  And if he doesn’t, then it’s nothing years of therapy can’t cure later on in life.  Just look how I turned out!

I just don’t think that today’s society uses any sort of evaluation criteria when making consumer purchases.  I think the word “budget” is something most families believe is for the government to use, and has no place inside the home.

You don’t need that new game console every single Christmas just for Billy to love you.

You don’t need to re-decorate your bathroom every two years.

And if you don’t have the money, then why the hell are you doing it in the first place?

The concept of the credit card was so foreign to me when I got my first VISA.  I found it amazing that this card replaced cash, and at the end of the month I just wrote a check to the company and they’d send me an itemized list of all my purchases for FREE!  I thought, “How the hell do these companies make any money?”  It wasn’t until later on that I realized morons paid 29% interest…

I know that some people just “don’t have enough money to live,” and thus they need to use their VISA to pay for things.  But here’s a novel idea: get a freakin’ line of credit with a 7% interest rate instead of the 29% you pay on your VISA!

The word “VISA” is actually Spanish for “legalized loan-sharking.”

I’m not saying that every nine-year-old child should use a wooden $12 hockey stick from Canadian Tire, but Tiernan doesn’t need the same $329 graphite-composite-gold-diamond hockey stick that Tyler has.  And if both Turner and Tristan have the $400 model, it doesn’t mean that a family living on table scraps needs to compete with this.

Now that Christmas is upon us, I’ve been reading all these articles from “Financial Gurus” in the Globe and Post about how to save money around the holidays.  They say things like, “Keep track of your purchases so that you know what to expect when you receive your credit card statement in January.”

Is that really novel advice?  How about this, “If you don’t have $5,000 to spend, then don’t spend it.”

They talk about ‘Credit Card Statement Day’ like it’s some sort of Armageddon, and it really shouldn’t be.  Whatever happened to responsibility and accountability?  Consumers are acting like money has no value when they pile debt onto their credit cards, and then they act shocked and disappointed when they see the end result on their statements.

And even those consumers who do keep track of purchases are still spending too much because they’re buying things they don’t need.

Last night, I watched the world’s greatest comedian, David Cross, in his recent DVD “Bigger and Blackerer.”  I actually paused the video to write down the following assessment of needless consumer products, “Their existence is predicated on the false sense of necessity.”

Gosh-darn is he ever brilliant!  He takes out the “Sky Mall” magazine that we all see on the airplane and goes through the list of products such as the coffee mug with a clock on it that is described as, “A clever alternative to looking at your watch!”

Cross uses the extreme examples to prove his point, but don’t most goods and services in today’s society have an existence that is predicated on the false sense of necessity?

And even goods and services that do represent a quantifiable “need” are being over-bought.  Perhaps a $450,000 house will serve you just fine, but since the banks are lined up to lend you money, you may as well over-extend yourself and pick up the $540,000 house down the street.

Or, maybe that’s just how I see things.

I’ll sum this all up with a personal example.

A while back, I dated a much (much) younger girl.  She believed that I was “rich” because, as she put it, “You can buy anything you want…within reason.”  Within reason meaning that I’m not going to buy a lear-jet, but maybe I can buy an $8,000 fur coat tomorrow and it won’t really affect me.

I explained to her that being truly “rich” means you’re in the St. Regis Hotel in New York eating actual gold on your chocolate cake for $1,400 a pop.  As David Cross says, “If that’s not the ultimate ‘F*ck you’ to poor people, then I don’t know what is.”  That is being truly rich.  The rest of us have to worry about things like debt-to-income ratios.

But you know what?  I’m not going to buy an $8,000 fur coat tomorrow because I don’t need one, and I don’t want one.  But really, I just don’t need one.  I have a coat already, thanks.  In fact, I have several.

I think most people already have most of what they need but they want more.

They want better, newer, bigger, faster, shinier, cooler, sexier, sleeker, more expensive, more popular, more exciting, and last but not least – whatever their friends are getting.

But not everybody can afford to keep up with the Joneses, and thus we have to take on debt to do so.

Maybe the United States’ government is swimming in trillions of dollars worth of debt (click HERE to see their running debt clock), but it seems that their personal debt-to-income levels fall short of what we Canadians feel comfortable taking on.  That in itself scares the crap out of me…

Should we expect anything to change?  I doubt it.

And even when the government steps in and tries to legislate people out of taking on debt they can’t afford, the lenders always seem to find their way around it…