As hometown British Columbians, Progressa loves to show off our BC pride. We often have cause to celebrate, coming in the form of studies and polls that consistently rank our province and the cities we live in as some of the best in the country, if not the world, in terms of livability, environmental stewardship, economic growth, business stability and other important categories. However, BC holds a new distinction in the personal finance world that is cause for some caution in lieu of celebration.
A new report by BC-based credit union Vancity shows that British Columbia leads all Canadian provinces when it comes to the use of payday loan services. According to Vancityâs report, lender activity in BC has jumped 58 per cent between 2012 and 2014. Of these, 54 per cent of borrowers were identified as taking loans to obtain emergency cash for necessities.
BC’s cost of living has also increased to be the highest in Canada, creating additional stress for many people’s personal finances. Reliance on payday loans for day-to-day needs may appear to be a quick fix in the face of increasing pressures on your budget – after all, you’re a responsible adult! You’ll pay it off on time, no problem! Right?
Unfortunately, payday loans are not that simple. They are a model through which consumers get locked into a cycle of debt, and are increasingly subject to the high fees and interest rates associated with repeated accumulation of short term debt over time. According to Vancity’s report, the number of people with a history of more than 15 payday loans increased over 600 per cent over the two-year span. Even more interestingly, the majority of respondents to the Vancity poll were gainfully employed and had completed post-secondary education. This confirms British Columbians increasing dependency on unstable forms of debt, in an environment where just one missed repayment can have dire consequences for your financial health.
In lieu of a continuous reliance on debt, consumers adjusting to a higher cost of living or hoping to save for a special purchase should focus on eliminating their debts through consolidation and directing their financial plan efforts at increasing their savings as a percentage of their income. It may be getting harder to make your budget work, even with a solid job and a good education: the stronger a financial position you can put yourself in through day-to-day financial management and eliminating debt, the better. Progressa is able to help you get out from under your existing bills and obligations so you can get to your savings goals faster, budgeting smarter and better in order to be able to afford your everyday needs and have money left to keep and grow for the future. BC is, after all, still a great place to live – and we should keep it that way by creating an environment in which anyone can reach their financial goals without becoming a province of serial debtors.