Five ways Canadians are failing at finance
Every year on April Fool’s Day, we pull pranks in the name of good-natured fun. Being on the receiving end isn’t the worst thing in the world either; playing the fool, once a year, can actually be fun.
Unfortunately, when it comes to money, some Canadians are playing the financial fool year-round. Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, says the state of personal finance in Canada is no laughing matter.
“We are seeing incredibly high debt levels and incredibly low savings rates,” says Schwartz. “It’s almost as if we’re the butt of a very unfunny joke.”
Schwartz isn’t kidding around:
- The average Canadian owes a record $1.65 for every $1.00 they earn (Statistics Canada).
- Canadians owe an average of $21,458 in non-mortgage debt (Equifax).
- The current household savings rate in Canada is 4 per cent, compared to nearly 20 per cent in the 1980’s (Statistics Canada).
According to Schwartz, financially literacy is key in reversing the trends, and he points to the low recidivism rate of Consolidated Credit’s Debt Management Program (DMP) as proof.
“We help people get out of debt, but more importantly, we help them stay out of debt,” says Schwartz. “In many cases, the DMP causes our clients to start thinking about their money in a whole new way, and more often than not, they develop some very good habits.”
The team at Consolidated Credit put together a list of five ways Canadians are failing at finance, and how you can prevent them from happening to you:
- Failing to budget. Less than half of Canadians use the most basic financial tool – a budget. Turning a blind eye to your spending habits will prevent you from achieving your financial goals. Check out Consolidated Credit’s suggested budgeting percentages and learn how you can take control of your spending.
- Failing to tackle debt. Actively reducing your debt requires strategy and discipline. Passively making the minimum payments on your credit card will keep you on a debt treadmill for a very long time. Consolidated Credit’s debt calculator shows you how you can dramatically accelerate your debt repayment by increasing your monthly payments.
- Failing to save. A healthy savings account will help you weather the financial storm of unemployment, unexpected expenses, or a reduction in income. Set up automatic payments with your bank so that your savings account grows with every paycheque. Check out Consolidated Credit’s savings calculator to see how every little bit can help.
- Failing to choose needs over wants. It’s an age-old test but it is more relevant than ever in today’s hyper-consumerism world. When you are about to buy something, ask yourself whether you want it or whether you need it. Everybody deserves a splurge every now and then, but not at the expense of necessities, savings, and debt reduction.
- Failing to seek help when you need it. Money can be a taboo topic, particularly as it relates to debt and financial struggles. If you seem to be continually drowning in debt, the earlier you seek help the better. Consolidated Credit’s trained credit counsellors offer free, non-judgmental advice and can be reached by dialing 1-888-294-3130. Take a look at some of the testimonials written by successful Consolidated Credit clients and learn how one simple call can free you from the chains of debt.