Canadian Spending Habits: How Do You Measure Up?

When you are in debt, you might feel like you are the only one. However, there is ample data to suggest that Canadians have a healthy appetite for spending beyond their means.

  • According to the most recent data from Equifax Canada, Canadians hold on average $22,837 per person.
  • The biggest expenses in Canadian households are food, shelter, household operations, and household furnishings and electronics.
  • According to the most recent data from Stats Canada, the average household debt ratio (household debt as a proportion of household disposable income) is at 168 percent.
  • According to the Canadian Payroll Association, almost half of respondents (47 percent) are living paycheque to paycheque.
  • Forty-two percent of respondents save less than 5 percent of their earnings.
  • Thirty-one percent of respondents say that their debt loads have climbed in the past year. They attribute the increase in debt to more spending.


“With having had a low-interest rate environment for years, Canadians have widely subscribed to the buy-now-pay-later mentality and huge debt loads have become the ‘new normal’. As the cost of living increases, the cost of debt is, as well as interest rates increase. That means household incomes won’t stretch as far as they have in the past, and Canadians need to alter their spending habits to compensate,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.


Have you been living without a budget, and now finding that your spending habits have gotten you into debt trouble? Pay your debt down and learn how budgeting is your ticket to debt-free living. Call one of our trained credit counselors at or check out our free online debt analysis .


If you are keen to change your spending habits, you need to determine why you are spending beyond your means. Spending patterns are largely behavioral, so it can help you to understand why you are spending. When you know the root cause, you will be better able to adjust your behavior to have financial success. How do your spending habits measure up to other Canadians?


Do you have a budget?


The most common reason that people overspend is that they don’t have a budget. If you spend beyond your means over an extended period of time, for whatever reason, you will eventually end up over your head in debt.


Sit down and make a budget that will be the framework for your spending. List all of your current expenses and your income. Prioritize needs and wants and figure out where you can cut back so that you can consistently live within your means.


Be sure to include savings as part of your budget. Also, be sure to track your spending. This will help you to identify your spending habits.


Are you spending on retail therapy?


Do you engage in retail therapy? While the moment of purchase may give you positive feelings, dealing with the debt and the stress that comes afterward isn’t positive. It’s also not doing much to deal with the real reason that you are spending.


Shopping for some can serve as relaxation or escape; you visualize yourself using these new purchases and it brings you pleasure. Retail therapy also has social connections. Unless you are shopping online, you are out interacting with the public, or maybe even shopping with friends.


Like all other indulgences, retail therapy can be tolerable if done in moderation, but how do you know if it has crossed the line into a brewing debt problem? It is also imperative that it fits within your budget.


If are consistently spending outside of your budget, find yourself lying or hiding purchases from family and friends, missing work or social engagements for shopping, ignoring credit card or bank statements or becoming unable to make debt payments, it is time to change your spending habits.


“Seek other ways to get the positive feelings that retail therapy provide. Establish social connections doing activities that are free or low-cost, like going for walks or spending time visiting with friends and family. Find other ways to relax like yoga or exercise. If you feel like you have a deeper problem, it would be beneficial to get help from a mental health professional,” says Schwartz.


Are you trying to “keep up with the Joneses” by overspending?


Another reason that people overspend is because they are trying to impress other people with their material goods. Like retail therapy, this is more of a psychological issue than financial mismanagement and needs to be addressed as such.  It often comes down to low self-esteem.

Does buying all of these items (and then dealing with the bills afterward) make you feel better about yourself? Does it impress those around you? Maybe, but those people who are only impressed by your material purchases aren’t really the best people to surround yourself with. You need a positive circle of support to connect with you and with your value-without a price tag.

Change spending habits to saving habits

In addition to addressing the root cause of your spending problem and putting a budget in place to guide you, you need to adopt good habits that will help you to build up your savings. As data shows, many Canadians have very little saving to draw on because they spend more than they should on a monthly basis.

To change this habit, pay yourself first. Have automatic savings come directly off of your paycheque, right into your savings account. This is seamless and you won’t even notice that it is gone. The best part is that it is done for you and you don’t have to scramble for money to put into savings at the end of the month.

Ready to make changes that will help you to spend within your means? Call one of our trained credit counselors at or get started with our debt analysis .

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