A new report on consumer debt in Canada, published by Manulife Bank, highlights some important statistics that will shape our understanding of the pressures and challenges faced by citizens of all provinces in many different income brackets and economic situations.
One of the report’s key findings was that 37% – more than one third – of Canadians found themselves financially unprepared to pay bills or cover expenses at least once during the past year. Four per cent of respondents said they found themselves in that situation almost every month, while 10 per cent said it happened to them a few times in the past 12 months. Another 23 per cent said it happened once or twice in the past year.
The report identifies rising housing costs as one of the major contributors to this trend. An increasing number of respondents also indicated that they planned to spend their earnings on their homes in lieu of contributing to retirement savings. Rick Lunny, CEO of Manulife, noted that Canadians need to find a balance point between debt repayment and retirement savings.
Lunny followed up this assertion by noting, in a Global interview, “Everybody hates doing budgets. I get that, but a $4 latte every day of the week or a gym membership these things add up.” While there is immense truth in the statement that budget planning forms the core of a personal financial strategy, the ground level approach that most Canadian savers will take to build their financial futures is, as this blog has previously noted, much more complex than saving a cup of coffee a day. Balancing day to day and long term needs involves a wide-ranging set of advisory decisions.
Preparedness is one of the great virtues when it comes to your finances. Unexpected financial challenges – those without recurring and predictable billing – are even harder to respond to than the usual monthly expenses. Alternative lenders are helping more Canadians respond to these unexpected events, and to gain control over their regular expenses in order to focus their energy on building for the futures.