From MoneySense’s In the Money blog

This holiday season we must ask ourselves, is Bank of Canada governor  Mark Carney being a Scrooge or just a prudent economist?

Earlier today M-Carn (I’ve always wanted to give him a J-Lo-style nickname) told us free-wheeling Canucks that we have to reign in our spending. His exact words were that we “must be vigilant” and not let rising levels of household debt spiral out of control.

He’s not just telling us this so we think twice before splurging on that large screen TV the wife is dying to get her hands on for Christmas (umm… yeah, the wife), but because interest rates will soon be going up. (Carney’s pledged to keep rates at 0.25% until June 2010.)

Last week, the central bank revealed that the percentage of high-risk households, or homes where 40% of income is allocated to paying down debt, would jump through the roof by 2012 thanks to rising interest rates. Why will this happen? Because the rates are so low now that people are using their credit cards and buying homes, just as the BoC hoped we would.

So, what to do. Keep spending or prepare for those rate hikes? I want to go with the latter, but man, I’ve had to shell out a lot of dough for Chanukah presents this year. Not to mention daycare, groceries, the occasional night out — if anyone can tell me how to reign in these more or less fixed costs so my credit cards doesn’t skyrocket come late 2010, please let me know.

And, if we can figure it out, maybe we can all have a better chance of surviving the economic recovery.