The survey reveals that Canadians are far too comfortable carrying high levels of debt. Respondents were asked how comfortable they were with their current financial situation and how confident they were that they could come up with $2,000 within a month if an unexpected need arose. While the majority of Canadians (55%) are extremely or very confident they could raise $2,000 with a month, 92% would consider some form of borrowing to come up with at least some of the cash.
"It appears that saving money 'for a rainy day' has been replaced with access to debt to deal with financial problems," says Ted Michalos, a bankruptcy trustee with Hoyes, Michalos & Associates Inc. "What's even more shocking is that one in five Canadians believe it would take them two months or longer to come up with $2,000, even if they could borrow, and of those who could not raise the money within a month, 26% said they couldn't raise the money no matter how much time they were given. That's a lot of people who are already at their maximum borrowing capacity," adds Hoyes.
"Canadians are carrying record levels of debt and yet, surprisingly, 62% of those surveyed are comfortable with their financial situation. That is quite a disjoint. It's concerning to see that access to credit and taking on more debt has become an accepted part of financial planning," says Michalos.
The research also reveals that while 45% of Canadians say they have never faced a debt problem, 70% admit to needing immediate help with day-to-day financial matters, including paying down debt (20%), increasing savings (16%), and improving cash flow (13%).
"For many, the use of debt to not only pay for big ticket items like cars, but also to cover day-to-day living expenses, has become commonplace," adds Hoyes. The trend does not seem to be reversing. One in four Canadians (26%) agrees their debt level is higher than one year earlier. "The best advice we can offer all Canadians is to make a plan now to deal with emergencies and start paying down debt today," cautions Michalos.
The Harris/Decima survey was completed online using Harris/Decima's proprietary online panel. This data was gathered in a sample of 1,010 Canadians between August 15th and 23rd, 2012. A probability sample of this size has a margin of error of +/-3.1%, 19 times out of 20.
Hoyes, Michalos & Associates Inc., a consumer proposal and trustee in bankruptcy firm with offices throughout Ontario, helps people in financial difficulty. Further information is available atwww.hoyes.com/high-debt.htm
