Canadians’ non-mortgage debt levels have been on the rise in recent years and that unfortunate trend is continuing. The Globe and Mail recently reported that the typical Canadian has a debt load of $21,696.
This sounds bad, but the report also stated that Canadians have a firm handle on that debt…as long as the local economy remains strong. If not, then things can go south pretty quickly. In provinces like Alberta, which is slumping because of oil prices, the debt load and default rate are higher.
When I hear about personal debt, I always think about the many temptations that banks provide for spending money. First, it was just a credit card. Then it became several credit cards. Then lines of credit were introduced. If you do not pay close attention and tend to buy things on a whim, debt can add up quickly and the interest rates can be punishing.
I have mentioned this before, but it is incredibly important to have a budget. This allows you to know exactly what to expect each month in terms of bills and how much money you can put towards each. You will also know how much is left over for things like entertainment and trips. It also helps to put money aside for unexpected occurrences, such as medical bills, vet bills, car repairs, etc. On the plus side, one third of Canadians are entirely debt free and a quarter owe less than $25,000.
So, what is your current status? Are you free and clear or do you owe your bank and credit card company? What is your method of making sure that you do not spend more than you have coming in? I would love to learn more about how other people are making ends meet. Click the comment button and let us all know!