An alarming number of Canadians are burning the furniture to heat the home when it comes to their finances.
One-in-five Canadians surveyed by Leger say they will be forced to sell-off assets like RRSPs or cars to help pay off, or pay down their debt. They might even need to take out a second mortgage.
The results are hardly surprising considering the staggering levels of debt among Canadians. According to Canada’s national debt clock, the national debt is more than $691 billion or $18,700 per person. Almost half of Canadians are $200 dollars away from not being able to pay their bills.
The need to liquidate is most prevalent among males at 24 per cent, compared to females at 14 per cent.
Despite the grim outlook, most survey respondents with debt expect to take on new forms of debt. Those under the age of 55 are most likely to take on new debt, but debt among seniors is on the rise.
Credit card debt will represent the biggest form of new debt at 23 per cent. Lines of credit are next at 15 per cent, followed by car loans and increased mortgages at 13 per cent and 12 per cent respectively.
Kelley Keehn, author, educator and consumer advocate for FPSC encourages her readers, family and friends to account for every single dollar spent in a 30-day period.
Keehn says doing nothing else often gets results because awareness kicks in and people effortlessly cut back on spending.
“Many Canadians lack awareness of their spending habits and patterns,” said Keehn.
“There are several ways to create awareness, such as paying only with cash for a month which accesses a different part of the brain that is associated with loss aversion. A good person to take this journey with is a CFP professional who can help create a holistic financial plan.”