According to the latest from Equifax Canada, Canadian consumer debt rose 1.1% to $1.529-trillion up from $1.513-trillion. Canadian consumer debt continues to rise with Canadians taking on even more personal debt and mortgage debt. Previously consumer debt was up 7.7% to $1.42-trillion a year earlier. Canadians still seem to be using their credit cards despite the warnings to watch their borrowing and with the recent weakening economy in late 2014.
The average Canadian consumer debt rose 2.9% to $20,967, and this is not including mortgages and the main source of demand for credit for consumers was mainly credit cards.
Canada’s central bank raised concern regarding the continued rising debt of Canadian household that is now at 163% of their disposable income. So what does this number mean? It means they owe over $1.63 for each $1 in disposable income earned per year.
This ends up leaving little room for Canadians to save for their future, including their retirement.
With household debt and mortgage debt rising faster than ones wages or a families wages, this leaves less room for future savings and paying down the current debts faster. If you find that your spending is out of control and your debts are rising faster than you can pay off. A good place to start is to learn how to properly budget. You will need to identify your fixed monthly expenses, your variable monthly costs and include your infrequent expenses that occur throughout the year. See our page on cutting expenses for helpful tips as well.
With our setting up a budget, once you have your budget setup, you will have a better idea of how much actual money you have to work with for your savings and paying down your debts. Often when putting everything down in front of you, you can see exactly how much you are able to budget within your means.