What’s the Health of your Wealth?

Net worth on the rise for many Canadians

wealth healthYou may not consider yourself wealthy, but according to new data from Statistics Canada, net worth is on the rise for average Canadians. There was an average increase of 73 percent between 1999 and 2012.

When you break those numbers down further, the highest income earning families saw the greatest increase in their net worth, while those in the lowest income bracket (the bottom 20 percent of earners) saw the lowest increase in net worth. These calculations stand to reason; if you’ve got more cash coming in, you should have less need for debt. Also, if you’ve got more cash coming in, you should be able to sock a little more in savings, boosting the asset side of your own personal balance sheet.

So what if you’re in the lower end of the wage earners? To boost that net worth, you’ve got to be proactive in your money management.

What is net worth anyways?

An increasing net worth doesn’t mean you’ve got more income or a fancy house. It’s a simple calculation really, that looks at the difference between what you own (assets like houses, cars and savings of all kinds) and what you owe (debt of all kinds). The idea is to own more than you owe and to continue to grow the gap between the two over time.

“The fact that the data shows that Canadians are growing their net worth is good news,” says Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada. “It shows that, despite an appetite for debt, Canadians continue to be thoughtful with their money.”

“The key is to ride that wave and grow your savings. This will require a focus on paying down debt and embracing a cash lifestyle. This takes even more commitment and planning when you’ve got less cash flow,” he explains.

Keep the cash (flow) flowing

The best way to keep your debt load down? Don’t get them in the first place. Make a point of spending within your means. If you don’t have cash in your wallet, or earmarked in your budget, then the item in question is either something you need to do without, or make plans to save up and buy later.

When you accumulate less debt, you’ve got less debt to service. Less debt to service means more cash on hand. More cash on hand means you have money to support your lifestyle, and you can leave the plastic at home. The key is to curb your need for debt, at all.

Not all “assets” are equal

It is well worth your while to look at the different options available to you for investing your money.  You don’t have to be wealthy to invest your money either. There are options available depending on what you’ve got to invest, how you feel about risk and how long you plan to park it for. You can even look at things like a simple savings account or a Guaranteed Investment Certificate (GIC).  Wouldn’t it be nice to earn interest, instead of paying interest with your money (like on all those credit cards!).

Building up a positive net worth happens over time, so it is important to have a plan in place, and to be patient with it. Being proactive today and tending to the savings side of your budget is the key. The slow and steady will win the wealth race in the long term.


Maybe you’ve already accumulated debt, and you’re finding that it’s really eating into your cash flow.  Consider calling one of our trained credit counsellors at 1-888-294-3130 or check out our free online debt analysis tool to help you identify where you can make changes and plan for your financial future.

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