(TORONTO, ON) – According to a recent online RBC survey, an increasing number of Canadians are living debt-free, with 26 per cent of respondents claiming to have no personal debt. However, the remaining 74 per cent of respondents indicate that those Canadians still carrying debt have increased the burden, raising personal debt levels to an average of $13,141.
While encouraging, the RBC poll still indicates that far too many Canadians are taking on increased levels of debt – and an alarming one in three are experiencing signs of stress or anxiety as a result of their debt loads.
“It’s positive to see more Canadians eliminating their debt, but more needs to be done to make eliminating debt a priority,” says Jeffrey Schwartz, executive director of Consolidated Credit Counseling Services of Canada, Inc. “When 34 per cent of Canadians are indicating that debt is the cause of anxiety, it’s time to get serious about our personal finances and begin implementing a debt reduction and savings plan.”
“Having both the Bank of Canada and the International Monetary Fund single out household debt as the top domestic threat to the Canadian economy is a strong indication that our habits and attitudes towards spending and savings need to change,” added Schwartz.
To help Canadians relieve their anxiety and focus on paying down their debts, Consolidated Credit offers these easy strategies to get your financial house in order:
- Keep track of spending – write everything down. Identify your spending and look for alternatives to fulfill the same needs at a lower cost.
- Add savings and debt repayment as line items on your budget. By allocating a small portion of your income to these areas you will make great progress in paying down your debts and building up your savings.
- Avoid borrowing. Borrowing against a home or your income tax refund to pay off debt may be convenient but it is also dangerous, as it puts your home and retirement security at risk.
- Don’t treat leftover money at the end of your budget as a bonus. When you have leftovers, the tendency is to use them to purchase “wants”. Instead, focus leftover money on paying down your debts and adding to your savings account.
- Pay off high interest debts first. The most efficient way to resolve debt is by paying down the highest interest rate balances first. Once the high interest debt is paid, tackle the next highest, and so on. Remember, to continue paying the minimum due on all other debts.
With the Canadian household debt-to-income ratio reaching an all-time high of 154 per cent, Consolidated Credit Counseling Services of Canada understands that the first steps towards debt reduction can be overwhelming. For more information on budgeting techniques and eliminating debt, visit Consolidated Credit online and download our booklet, Budgeting Made Easy.