Canadians Comfortable with Soaring Debt Levels, BMO survey says
A new survey revealed that Canadian debt loads are higher and that we’re feeling fine about it. The BMO report showed that people are carrying close to 22% more debt than last year, rising from $76, 699 to $92,699 and that people aren’t concerned.
Eighty percent of all households carry debt but state they are feeling less stressed about it. Almost half report they plan to borrow more. Christine Canning, head of Everyday Banking at BMO, attributes Canadian’s confidence with managing their debt to low interest rates.
“[M]any Canadians may have become more comfortable over time with managing their debt," Canning said in a statement. Interest rates will rise again so it’s key for people to start making debt management a priority.
“It's becoming increasingly important that Canadians stress-test their ability to afford the debt they currently have so they can effectively manage their finances in a higher rate environment."
According to the survey results, interest rates are on Canadian radars. Sixty-four per cent of those surveyed said they would be “stressed” if interest rates rose two percentage points. Regardless, many Canadians remain complacent about their debt levels
The complacency could lead to financial problems in the future, however. Several survey respondents reported borrowing for things like vacations (28 per cent), entertainment (22 per cent) and electronics (20 per cent). These things don’t appreciate in value and can become taxing to Canadians.
Even though much of it comes down to bad habits and impulse spending, many Canadian want to improve their financial situation. Canning advises starting small: "Start by taking small, deliberate steps to reverse bad spending or savings habits to begin building positive momentum. Then, put strategies in place to help you stick to the program."
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