10/31/2019 15:43 EDT

3 In 10 Canadians Can’t Cover Expenses, And High Earners Are Among Them

The LGBTQ community and Canadians with disabilities are among the most financially vulnerable, data shows.

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MONTREAL ― Canadian households are finding themselves in an increasingly tight spot when it comes to finances, with savings shrinking, debt payments growing, and a larger share of people finding they simply don’t have enough to cover expenses.

The latest survey from accounting firm MNP found that the amount of money Canadians have left over at the end of the month, after paying all their expenses, has been steadily shrinking.

It is now at its lowest level since the quarterly survey began in early 2016, with Canadians reporting an average of $557 left over.

HuffPost Canada/MNP

But that statistical average papers over an alarming reality: Nearly three in 10 Canadians (29 per cent) now say they don’t have enough money to cover their monthly expenses at all. That’s up from 25 per cent in the previous survey.

Forty-one per cent of Canadians have less than a week’s worth of expenses saved up.

And those who are hitting the financial brick wall each month aren’t necessarily low-income earners; instead, some are high spenders.

“Just because someone has a high income level doesn’t necessarily mean that they’re financially healthy,” said Rina Degrazia, vice president of financial education at TD Bank.

Watch: Tips for growing your savings on a low income. Story continues below.


According to an exhaustive survey the bank released this week, there is only a weak correlation between how much someone makes and whether or not they are financially healthy.

It found that 18 per cent of high earners ― those making $150,000 a year or more ― have below-average financial health.

The TD survey assessed the financial state of some 10,000 people and categorized them into four groups: “Financially healthy,” “financially coping (high),” “financially coping (low),” and “financially vulnerable.”

Overall, 27 per cent of Canadians fell into the “financially healthy” category, while 15 per cent fell into the “financially vulnerable” category.

Just because someone has a high income level doesn’t necessarily mean that they’re financially healthy.Rina Degrazia, VP of financial education, TD Bank.

The survey assessed people by looking at their level of short-term (rainy day) savings and long-term (retirement) savings; their borrowing habits; and how much of their income goes to fixed costs like mortgages, car payments and utilities.

All those things are interconnected, Degrazia said ― if you neglect one part of it, other parts will suffer.

“Your debt load affects your ability to save, and if you don’t have savings, you can’t plan ahead for expenses, (so when they happen) that means even more debt,”  she said.

That would be one definition of what the experts call a “debt trap.”

LGBTQ, Indigenous people more likely to be vulnerable

The TD survey found noticeable differences between different groups of Canadians, highlighting lower-than-average financial scores among Indigenous people and people with disabilities.

It found that women are slightly more likely to be financially vulnerable than men (15 per cent versus 13 per cent) and have a lower average financial score than men, which it attributed to facts such as that fewer are among the top earners, and a larger share work part-time or low-income jobs. 

People in the LGBTQ+ community are notably more likely to be financially vulnerable ― 20 per cent of survey respondents, compared to 14 per cent for non-LGBTQ people.

“Within the community, transgender women fare the worst and are more likely to self-identify as having a low ability to financially cope,” the report noted.

But it also noted that a larger share of young people openly identify as LGBTQ compared to older generations, so the data may also reflect the fact younger people are more financially vulnerable than older generations. 

Broken down by generation, Baby Boomers are ― not surprisingly ― the healthiest, with just 10 per cent financially vulnerable.

Eighteen per cent of Millennials and 14 per cent of the youngest Generation Z are vulnerable, but the highest rate ― 19 per cent ― belongs to Generation X, those between the Boomers and Millennials. Many in that generation famously spent the 1990s futilely looking for work.