Poll Asks: Just How Much Spending Did Canadians Do Over the Summer?Sep 28, 2015
September is a good time to get back to reality after long, sunny days and warm summer nights. With all the costs associated with kids heading back to school (tuition, textbooks, clothes, shoes, supplies), many Canadians are realizing just how much spending they did over the summer. A recent Ipsos Reid/BDO Canada Limited poll shows that almost one-third of Canadians reported an increase in their debt since May. The largest areas of spending were fairly predictable with vacations and day trips averaging $701, dining and entertainment $770, and home renovations at $1422. Many of these areas were higher in other provinces, like B.C. who spent $2961 on home renovations. While concerning, these stats may not be surprising. In a May 2015 poll, 88 per cent of those interviewed said they had no intention of spending less this summer.
Economic downturn not enough to dissuade spending
Recent headlines highlight the ever-inflating housing market, despite Canada’s technical recession. Oil prices have dropped, leaving 35,000 oil patch workers unemployed. Canadian debt loads exceed average income and yet this isn’t enough to rein in spending. Low interest rates are a tempting solution for individuals looking to buy a bigger home or finance a large renovation. This type of spending is also seen in the number of personal loans, HELOC, credit cards and lines of credit Canadians have taken on. Impulse spending may be partially to blame, but high costs of living and everyday expenses can cause consumers to turn to debt for a quick solution, though they may not have the means to repay it. A recent increase in debt relief solutions like personal bankruptcy (up 4.2 per cent) shows that these trends may be an indicator of a larger problem.
Reversing the trend
One way Canadians can reconnect with better spending habits and begin to take steps toward debt relief is to educate themselves. The Financial Consumer Agency of Canada (FCAC) is a great resource for financial literacy education. The FCAC teaches Canadians how to avoid debt, set savings goals and plan for the future. Increasing financial literacy skills can help us in many aspects of our lives and is essential at any age. The FCAC offers easy-to-use tools which will help guide you toward your financial goals.
The Ipsos Reid poll shows that millennials and young parents are the group carrying the most debt and most likely to take on new debt. For these age groups and any others who are feeling the effects of overwhelming debt, it can be beneficial to take a Financial Stress Test to see how your debt is affecting your personal or family life. This is often a wake-up call that things need to change. From there, you can use the tools to develop a budget that includes debt repayment.
A firm understanding about your finances offers a buffer in times of economic uncertainty. Budgeting and money management are necessary when planning for the future. For Londoners who may be overwhelmed by mounting debts, it’s time to look into options for debt relief.
To learn more about financial literacy and debt options for your family, join the online conversation by searching #CountMeInCA #BDODebtrelief on social media.