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Low rates causing Canadians to spend more than they can afford

Low interest rates may be pushing Canadians to spend more, according to the data from the latest MNP Consumer Debt Index. The poll found that six in 10 Canadians feel now is a good time for them to spend, even if they can’t afford to. Meanwhile, nearly half of those surveyed said with rates being low, they are more comfortable carrying debt than in the past. That financial disconnect has set off alarm bells for CTV’s Chief Financial Commentator Pattie Lovett-Reid, who called the financial disconnect “outrageous.”

Many ETFs morphing into mutual funds

Canadian ETF inflows surged by 49 per cent in 2020 to a record $41 billion from a year earlier, as investors plowed cash into all asset classes after the pandemic-induced plunge, according to a recent National Bank of Canada study. Personal finance columnist Dale Jackson writes that while ETFs are growing in popularity, investors must do their homework as many new offerings are increasingly looking like actively managed mutual funds. And that, of course, could mean higher fees for you.

Toronto’s rental apartment vacancy hits record

The rental apartment vacancy rate in Canada’s biggest city climbed 5.7 per cent in the fourth quarter of 2020, according to data from Urbanation. The real estate research firm said the vacancy rate reached a 50-year high when examining historical CMHC survey data for Toronto back to 1971. The data comes as more residents leave Toronto for suburbs and smaller towns during the COVID-19 pandemic. While average rents in the surrounding 905 region dropped only 2.2 per cent to $2,139, Toronto’s fell 10 per cent year-over-year to $2,337 in the quarter.

Muslims look to Halal investing to make money in line with religious values

Socially responsible investing is a growing trend in Canada, including for those who invest based off religious beliefs. Responsible investing represents 62 per cent of Canada’s investment industry and has $3.2 trillion under management, according to the Canadian Responsible Investment Trends Report. For Muslims, this includes avoiding investments in pork, alcohol, tobacco, weapons, adult entertainment and especially debt, bonds or interest. Seventy per cent of Muslim Canadians said they would participate in Halal investing if there were more products available to help them do so, the report said.

TIP JAR

“Rather than think, I’ve got this whole big thing or ‘How am I going to save a 12-month emergency fund?’ What could you do in the next week? What is the teeny, tiny part of that goal that you could focus on for a very, very short period of time? Because just those little things give you a sense of control.”

- Bruce Sellery, personal finance expert and author of Moolala, on setting “microtimelines” for financial goals