More than half of Canadians say they are just $200 away from financial insolvency at the end of each month, and nearly as many regret how much debt they’ve taken on, a new survey has found.
The survey, carried out by Ipsos for insolvency consultancy MNP, highlights the fallout from the debt binge Canadian consumers have gone on. Household debt reached an all-time high above 167 per cent of disposable income in the fourth quarter of 2016.
Fifty-two per cent of respondents say they have no more than a $200 margin to cover their bills each month. That’s actually down from 56 per cent in MNP’s previous consumer sentiment survey, carried out last fall.
One in 10 said they have less than $100 each month left over each month, while nearly one-third (31 per cent) said they don’t make enough money to cover their expenses.
"There is an unquestioned attitude that living in debt is normal,” said Lana Gilbertson, a Vancouver-based insolvency trustee with MNP.
“Many are in denial, believing they can manage their growing debts. Others don’t know where to go for help or are afraid to address their debts head on.”
The survey found 49 per cent regret the amount of debt they have taken on over their lifetime, down one point from last fall’s survey.
A lack of financial literacy skills among some Canadians may be making the problem worse, MNP says. While 48 per cent of all respondents said they were concerned about their debt burden, that rose to 61 per cent among those who aren’t confident in their understanding of finances.
“Many are caught on what I call the ‘minimum payment treadmill’, paying only the interest on their debts, and they are just not getting anywhere,” Gilbertson said.
“If you are using credit to pay for basic expenses, or are pulling equity out of your home to service other debts, it’s time to seek the advice of a professional.”
Also on HuffPost