Many Canadians are embarrassed about the amount of debt they have and have reached a “tipping point” with their budgets, a new report suggests.
According to a recent report by the Credit Counselling Society that surveyed 1,532 Canadians, 65 per cent said they had some level of non-mortgage debt — that is debt tied to credit cards, a line of credit and car loans, among other things.
Of those who had non-mortgage debt, more than half said it made them feel worried, anxious, and frustrated, while 33 per cent said they’re embarrassed by how much debt they are carrying.
Furthermore, 29 per cent of those with debt indicated it was between $10,000 and $49,999, 26 per cent said it was less than $10,000 while 10 per cent said they owed more than $50,000.
The report also found that one-in-three with non-mortgage debts are struggling with their balance owing, and are only making the minimum payment or less.
“Canadians have reached a tipping point with their budgets,” Isaiah Chan, Credit Counselling Society’s vice-president of programs and services, said in a press release, adding. “They are simply not able to cut their expenses any further and as a result, take on more debt to get by, which only adds to their problems.”
Respondents were also asked about their current financial situation compared to how it was at the beginning of the pandemic.
According to the report, 31 per cent felt their financial position was worse is than it was at the beginning of the pandemic while 28 per cent said their situation was better. The majority, 41 per cent, felt their situation was the same as it had been at the beginning of the pandemic.
Furthermore, 76 per cent of respondents who said they were worse off financially now than at the beginning of the pandemic said spending on essentials such as food, housing and transportation was the main cause.
Manitoba residents were most likely to indicate that their financial situations were worse off than at the start of the pandemic, while British Columbians were more likely to be better off financially now than at the beginning of the pandemic, according to the report.
When it came to seeking financial assistance, 44 per cent of all respondents said doing so would make them feel embarrassed, with lower-income Canadians having the most negative impression of reaching out for assistance.
“The report found that most people would rather talk about their physical or mental health or personal relationships, than their financial problems, which isn’t surprising,” Credit Counselling Society president and chief executive officer, Scott Hannah said in a press release, adding.
“This echoes what we hear every day. Money is still a topic that many people are afraid or embarrassed to talk openly about, which gets in the way of their ability to get help when they need it most.”
The Credit Counselling Society’s Consumer Debt Report was conducted based on a survey conducted among members of the Angus Reid Forum. The full report can be viewed here.