Canadians Digging Deeper Into Debt
Tips to recognize a debt problem and rein in borrowing
TORONTO - In a response to Statistics Canada's report that the average household debt-to-income ratio in Canada has reached a new high of 165 per cent. According to the report, released on Friday, March 15th, the average Canadian household now owes $1.65 for every dollar they earn. However, Stats Canada also reported that this is the smallest increase in the past year, indicating that credit accumulation among Canadian households is slowing down.
"It appears as if Canadians are finally taking the Bank of Canada's warnings to heart and are making an effort to rein in risky levels of debt," says Jeffrey Schwartz, executive director at Consolidated Credit. "This is the smallest increase in more than a year, but Canadians still have a lot of work to do in order to pay down their debts and save for the future."
While many families are making efforts to build a healthy financial future, many other Canadians families continue to dig themselves deeper into debt. "If you are one of many Canadians carrying an unmanageable level of household debt, it's time to take a serious look at your household budget and find ways to cut back on your spending," adds Schwartz.
These tips, from Consolidated Credit, will help Canadians recognize the warning signs of a debt problem and provide steps to find savings in their household budgets:
Debt Warning Signs
- You are struggling to keep up with minimum payments;
- Your credit cards are maxed out;
- You are paying one credit card with another;
- You are dipping into your savings or retirement accounts to pay bills.
Tips to Cut Spending
- Create a monthly budget - this will give you a snapshot of your finances.
- Include debt repayment and savings as expense items in your budget.
- Prioritize you expenses and make cuts to any expenses you can live without.
- Make small changes in your budget, like buying no-name groceries or taking a brown bag lunch.
- Speak to a trained credit counsellor to discuss options for debt elimination.