Statistics Canada released its latest report on figures regarding personal wealth and debt levels recently, and the numbers are not as promising as some financial experts would like – in many cases they are actually worse. What are these numbers, and what do they tell us about Canadian consumer debt levels?
By the end of the second quarter of 2013, Canadian mortgage debt had reached $1.1 trillion – but this number is not included in consumer debt – or rather, debts such as credit cards or personal loans. In contrast, consumer debt reached a high of $500 billion.
A key measure of consumer debt is the debt-to-income ratio for each household. This means the amount of household debt compared against disposable income. As StatsCan reported, the second quarter of 2013 hit a record high of 163.4% – that is up from 162.1% for the first quarter of last year, and is a reversal of the trend that saw the ratio decline in the previous 2 quarters.
So what do these numbers actually mean? Well, according to financial experts, this is a good indication that Canadian households are still spending, on credit, but at a slower rate, which is a good thing. That being said, the key factor here is that the spending continues, meaning Canadian consumer debt levels continue to grow.
Also, while some experts say that this debt is not unmanageable, a recent Royal Bank survey conducted by Ipsos Reid found that consumer debt is still keeping many Canadians on edge – 38% polled stated they were anxious about their current debt load. If you find yourself in this category you are clearly not alone. And although experts seem to think that Canadians are going to continue to curb their spending, this may not be as feasible for all as they would perhaps like.
So, how do you measure up and what are your options? Are your debt levels on par with the average Canadian, or are you a bit more on the ‘stressed’ side. If your debt is keeping you up at night it might be time to think about a different solution. And again, you are not alone here either. The same RBC poll found that many Canadians are going a bit farther than just making a budget or using different tactics to decrease debt, stating debt consolidation has become a big favourite for many looking to reduce their overall debt load and save on interest.
Want some help coming up with a solution – DebtCare can discuss the many options regarding Canadian consumer debt and how to eliminate yours. Call us today at 1 (888) 890-0888 or visit us online at www.debtcare.ca