Canadian Debt Status Update: Planning the Future

Canadian debt, is once again making news headlines. Articles talk about how if interest rates on mortgage payments increase by 1 percent, many homeowners will be in trouble. Then you have articles claiming that interest rates are set to rise over the next couple of years.

The Bank of Canada stated that its trendsetting rate has been locked at 0.5 percent since 2015 and has not increased in 7 years. In contrast, the parliamentary budget officer stated that the central bank’s rate is set to rise to 3 percent by mid-2020. If Canadian debt is a problem now, you can imagine what will happen once the trendsetting rate increases to 3 percent.

Articles say that the average household debt has increased from $1.64 to $1.74 for every $1.00 of disposable income. In addition, that rate is set to increase from $1.74 to $1.80 for every $1.00 of disposable income by 2018. This leaves very little room for people to start chipping away at Canadian debt.

Financial Planning Statistics

With Canadian debt being such a hot topic, people need to start thinking of the future. Many financial advisers state that one of the best ways to tackle debt, is to plan your finances. These are a few statistics based on people who have planned for the future:

A study conducted by the Pension Research Council claimed that individuals who think about retirement have twice the wealth of those who don’t plan at all.

The Journal of Consumer Affairs found that individuals who use a retirement calculator have an increased likelihood to save for the future.

Sallie Mae’s “How America Saves for College” did a report on parents who put money towards their child’s college educations. Parents who planned for their children’s education saved 76 percent more than parents who did  not have a plan.

The Center for Financial Services Innovation published a study on unpredicted expenses. Households that plan for unpredicted expenses were 10 times more likely to be financially healthy than those that didn’t.

Dealing with Canadian Debt

The first step to solving the Canadian debt problem is to create a plan. Creating a plan is easier said then done and can be difficult if you lack experience. This why seeking the assistance of a financial expert is in your best interest.

We are Licensed Insolvency Trustees with the knowledge and experience in addressing the financial issues mentioned above. Our expertise can address any financial challenges you may face, including managing credit and most importantly finding a way to reduce or eliminate overwhelming debt.

If you need help, contact us by emailing or call us at 416 736 4357 (HELP). You can also book a free consultation with no obligations by filling out the contact form on our home page.

Make an appointment today for a custom-tailored solution specific to your situation. We look forward to assisting you.