Pattie Lovett-Reid: Why Canadians will continue to spend this holiday despite facing record debt

By Pattie Lovett-Reid

Christmas shoppers walk to stores at the Laurier shopping centre in Quebec City , The Canadian Press

Pattie Lovett-Reid

Chief Financial Commentator, CTV

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Canadians won’t hesitate to spend on Black Friday, Cyber Monday, or the rest of the holiday season despite carrying record debt levels – and it may be because the majority have convinced themselves they know how to manage their debt, according to a new Manulife Bank of Canada survey.

The survey, published Thursday, revealed over half (54 per cent) of Canadians think they know how to manage debt and the majority say they are committed to becoming debt-free (64 per cent).

But the problem is Canadians are carrying record levels of household debt-to-income.

Nearly one-quarter say they are embarrassed to talk about how much they owe and 40 per cent didn't know where to turn for help, with over half (55 per cent) seldom turning to family and friends for advice.

The report also highlighted the following findings:

Only 41 per cent are comfortable with their debt level
One in six Canadians believe their bank helps them pay down debt (16 per cent) and puts their needs first (17 per cent)
Those with financial advisors are more likely to be satisfied with their overall financial health
Most Canadians say being debt free is a priority but less than one-third achieved debt reductions goals in the past year
The majority of Canadians (53 per cent) believe financial challenges take a toll on mental or emotion health and one-third say it impacts their physical health.
More than 30 per cent simply don't know who to talk to

There is such a strong correlation between health and wealth. Financial fitness begins with basic financial literacy. You can't change something if you don't see it as a problem.

Start with a plan with concrete goals and a timeline. Go into your financial institution and ask for help to develop a plan. Don't self-eliminate and say you don't have enough money.

Every person deserves to have a financial plan regardless of their wealth situation. Having a plan puts you in control and helps to turn your intentions into reality.