TORONTO, ON – According to 680News.com, a recent Statistics Canada report notes, “Canada’s unemployment rate inched down to 7.2 per cent last month as employers added 7,300 net new jobs, with Ontario the only province showing any significant gains…June also saw a 16,600 drop in the number of active workers, which reduced the overall size of the labour force…”
There has been much concern regarding an impending interest rate hike among the banks, but the real risk is a loss of wages, according to Consolidated Credit Counseling Services of Canada. With companies like Research in Motion, General Motors and Rogers Communications each recently announcing cuts of up to 5,000, 2,000 and nearly 700 employees respectively, it’s clear several thousand Canadians will struggle to stay afloat. Even if they are fortunate to become re-employed, it will likely be at a reduced salary. There is also a ripple effect – as these job losses force people to cut back on spending, some businesses will face less revenue and the potential for further job loss.
“A layoff can be very dangerous if you are carrying debt. A reduction in income or a loss of income, coupled with little to no savings, spells disaster for most people. How will they pay their bills?” said Jeffrey Schwartz, executive director at Consolidated Credit Counseling Services of Canada. “This country is experiencing incredibly high debt levels right now. It is crucial Canadians begin paying back their debts today because tomorrow may be too late.”
Not sure if you’re carrying an unstable amount of debt? Some warning signals include:
- You only pay the minimum monthly payments on your credit card bills. This is the beginning of the downward debt spiral.
- You spend 15 per cent or more of your net income paying credit card debts. Experts agree you should only be putting about 10 to 15 per cent of your take-home income, after deductions, towards paying off credit card debts each month.
- Your income is already spoken for before you even get your paycheque.
If any of these sound familiar, it’s time to take action:
- Before you spend your money, ask yourself if you need it or if you just want it.
- Apply “extra” money to your debts – things like a paycheque bonus, tax return, financial gift, etc. – to pay down debt more quickly.
- Consult a trained credit counsellor and consider enrolling into a debt management program. They will work to help you consolidate your loans into one affordable payment, aim to reduce interest rates on existing debt and provide invaluable financial education materials.
To learn more about debt management, visit the debt management section of this website.