The headline in The Globe and Mail left Jeff Schwartz shaking his head this week. “Car-buying will fuel record consumer debt in 2014,” read Thursday’s business story.
“The average Canadian’s non-mortgage debt is slated to jump to a new high of $28,853 by the end of 2014, up more than a $1,000″ from the year before, the story said. To Schwartz, executive director of Consolidated Credit Counseling Services of Canada, that means 2014 will end with many Canadians being unable to pay off those debts. And that will make their 2015 a very depressing year.
“The worldwide recession devastated so many people,” Schwartz says. “I was hoping it would end with a silver lining: Canadians would be much more careful with their debts – because you can’t always control the money you make. But you can control much of the money you spend.”
Schwartz’s comments are somewhat less rosy than Leslie Preston, an economist with Toronto-Dominion Bank, who told The Globe and Mail, “So long as economic growth picks up modestly next year, I think Canadians will be able to handle this debt and support lower delinquency rates.”
Schwartz doesn’t disagree with Preston, but he cautions, “What happens if the economy doesn’t grow next year? I hate the thought of Canadians trusting their debt repayments to factors they cannot control.”
On the heels of this widely publicized story, Schwartz has been asked for his advice. Mostly, he’s pointed Canadians to the free resource Consolidated Credit offers on its website, called Everything You Need to Know to Manage Your Personal Finances. He also urges Canadians concerned about their debt to call for a free analysis at 1-888-294-3130.
“Not all debt is bad,” Schwartz says. “A mortgage is debt, and so are car loans. But buying more house or car than you can afford is what kills your budget and balloons you debt.”