More often than not, when monthly finances are tight, most Canadians turn to their credit cards or personal loans to make ends meet. Perhaps you feel as though this is something you alone are dealing with, but trust us, it is not. If you’re struggling financially, and looking for valuable, realistic debt advice, you’ve come to the right place.
While for some, this reliance on credit may be a rare occurrence, for others it is far more common, and is a symptom of a larger problem. Canadian wages are not increasing – they’re stagnating, according to Statistics Canada – and thus, when things cost more (as they do), and your income isn’t rising to meet those demands, taking on more debt may be the only answer you’ve got.
According to a recent Huffington Post article, “Canadians are taking on more debt and spending more money, but they aren’t earning more than they used to — a reality that may be sending Canadian households into what Conference Board of Canada chief economist Craig Alexander is calling ‘an endless debt cycle.’”
As Alexander notes, often when prices increase, but wages do not, people are motivated to borrow that which they don’t already have. This has been especially true with mortgage debt as house prices in Toronto and the GTA (and elsewhere) skyrocketed over 2016 and the first half of 2017, causing the average size of a mortgage in Toronto to increase by $50,000 in only a year. Low interest rates also contributed to the borrowing influx, which will also become problematic as interest rates rise, as they are expected to continue doing.
What this often results in, unfortunately, is an inability to pay those minimum payments.
As Licensed Insolvency Trustees, we see this all the time. If your debt has grown substantially over the last few years, and you’re having trouble meeting minimum payments, or worse, not meeting them, you could be digging yourself a hole that will be incredibly difficult to climb out of, even when wages and prices even out.
Instead of continuing to pile on the debt, perhaps it is time to consider the alternative options that may help alleviate some of your financial stress and get you back to a place where you’re not living paycheque to paycheque because of your monthly debt requirements.
At Spergel, we offer real-life debt advice – advice that doesn’t get you deeper in debt or lead to even more sleepless nights. Call us today, toll free, for a free consultation: 310-4321.