Photo: Unsplash/Sasun Bughdaryan
Several polls reveal that financial worries weigh heavily on Canadians.
The recently released MNP Consumer Debt Index fell seven points to a record high, reflecting declining confidence in the ability to repay debts.
Forty-five percent of respondents said they were not confident they would be able to cover their living expenses this year, an increase of five percent.
“Canadians’ financial optimism generally wanes as holiday bills come due, but this year more than any other, Canadians are feeling more financially insecure, likely due to the Omicron variant and the resulting pandemic fatigue, as well as rising inflation and the potential for higher interest rates this year,” says MNP Chairman Grant Bazian.
Almost half (46%) of Canadians said they were $200 or less away from not being able to meet all of their financial obligations. This includes nearly three in 10 (27%) who say they already don’t earn enough to cover their bills and pay their debts.
“It’s getting harder and harder for Canadians to see the light at the end of the tunnel,” Bazian said.
These sentiments are reflected in the latest study of consumer debt in British Columbia by insolvency trustees Sands & Associates.
The largest group of respondents (18%) said their debt was caused by using credit for essential living expenses that income could not cover.
This is followed by illness, injury or health problems (10%), marriage or relationship breakdown (8%) and employment-related problems (8%).
“Last resort” financing also continues to grow, with high-cost financing like payday or installment loans (9%) taking the fourth place among the most reported types of consumer debt.
Constant worry about debt was reported by more than four in five respondents.
Compared to the same time last year, more British Columbians are adopting bad financial habits, such as paying only the minimum balance on their credit card (22%, +2 points) or borrowing money they cannot afford to repay quickly (12%, +1pt), according to the MNP study.
With concerns about inflation and the cost of living at the forefront, nearly half (47%, +6 points) of British Columbians say they regret the amount of debt they have taken on.
A recent Angus Reid poll commissioned by Coast Capital revealed that 76% of Canadians do not feel in control of their financial situation and would need additional income to feel less anxious about their day-to-day finances.
Saving for retirement was reported as the top financial stressor for Canadians, with 35% of respondents saying saving for retirement keeps them awake at night.
Just over a quarter (28%) of respondents said that an extra $500 per month could improve their situation, and
40% said they would use the money to pay off their debts.
Four in 10 said $100,000 or less would be a “life-changing” amount of money.