Canadians and Debt
Canada is a great place to live. It provides many Canadians with great opportunities to discover their passion and career path of their choice. Our healthcare system is free and we have a lot of privileges you may not be able to experience if you lived in another country.
Although Canada is a great place to live with many advantages; Canadians tend to live out of their means. In Canada we have just over 2 Trillion Dollars in debt from just consumer credit, mortgage and non-mortgages, with mortgage debt accounting for 65.5% of this debt.
Equifax has reported that 46% of consumers are decreasing their debt while 37% are borrowing more. It is easy for consumers to increase their debt due to the low interest rates we have been experiencing in the previous years and the rising home prices.
A study conducted by CIBC shows that roughly 30% of Canadians took on more debt in 2016 and the reason for a third of it is because they could not keep up with their daily living expenses. Most people tend to borrow more then they can afford. With the cost of everything going up it is not shocking that people turn to other financial solutions to help them stay on top of their bills. Instead of taking on new debt we should stop and look at our finances and reevaluate. Maybe consider downsizing your current home to a house you can afford.
Although the debt in Canada is not growing at a pace that is necessarily concerning at this time, we want to make sure that we stop living the life we cannot afford. With the cost of everything going up it is easy to fall within a debt cycle. It is always a good time to reevaluate your finances to fit within your current means.