Interest rates continue to be set at historic lows and not surprisingly, Canadian continue to pile on non-mortgage debt. But here is the good news – we can handle it. According to a report released Thursday by TransUnion, Canadians’ delinquency rates remain low.
Canadians’ average debt level at the end of the third quarter rose to $21,686, up from $21,195. The provinces that are struggling the most continue to be those facing challenges in the oil patch. Alberta’s delinquency rate increased 13.39 per cent to 3.13 per cent, while Saskatchewan’s delinquiency rate rose 11.92 per cent to 3.46 per cent. By comparison, the national delinquency level stood at 2.70 per cent, up from 2.62 per cent a year ago.
Although these numbers are not ringing alarm bells, I find this report heightens our awareness that many are a whiff away from a financial crisis.
A recent study by the Financial Planning Standards Council found that one in five Canadians say they would run out of money in less than a week if they lost their job. Forty per cent say they would only have enough money to continue to pay living expenses for four weeks or less if they lost their job.
The report went on to say that two-thirds of respondents believe their financial situation has either stagnated or worsened over the past five years. Not surprisingly, two out of respondents said they worry about money at least once a day, while one in four said they worry about it constantly.
The FPSC recommends Canadians work with a financial planner to set goals, and build a plan tailored to their needs. In the long run, it can reduce stress. Their recommendation makes sense.
The study also found that 41 per cent feel they make more sound financial decisions than bad ones, and 26 per cent said they’re still unsure of where to go to turn for help. The good news is, 55 per cent said they keep a close watch on their financial affairs. The bad news? Thirty-five per cent say they live for today and let tomorrow take care of itself.
Don’t let your debt get out of control. Know your financial numbers and have a plan that includes planning for the expected. The unexpected could happen when you least expect.