Study shows that Canadians owe more money than last year, with seniors accumulating debt at the highest rate.
Clients may be striving for financial success, but they're dodging the hard work it takes to achieve it, says one Edmonton-based financial planning educator.
“We live in an era where everyone talks about working smarter, not harder … and I think that’s bred a society of really lazy people,” says Jim Yih, owner of Retirehappy.ca. “If you want to be successful you have to work smarter and harder. There’s no substitute for working hard.”
This sentiment, adds Yih, can have a direct impact on clients' spending habits and the amount of debt they acquire.
According to a study recently released by credit monitoring firm Equifax Canada, Canadians are carrying more debt than they were a year ago with consumer debt – excluding mortgages – up 3.7 per cent in the third quarter to $507.1 billion, up from $489 billion last year at the same time. Overall consumer debt, including mortgages, has also grown. Canadians now owe $1.36 trillion, up from $1.3 trillion a year ago.
The study also revealed that seniors are accumulating debt at the highest rate, with debt levels for those 65 years and older up 6.5 per cent from last year at the same time. Despite this, seniors still carry the least amount of debt for any age group.
“I see more and more 71 year olds who are still working. It’s crazy,” says Yih. “Some of them are working because they want to, but most of them are working because they have to.” (continued on Page 2.)
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On a positive note, Canadians appear to be better able to manage their debt with the delinquency rate – bills more than 90 days overdue – down to a record low of 1.13 per cent in the three months ended Sept. 20. This is down 1.22 per cent from the same time last year.
According to Yih, tackling debt takes more than meeting bill payments or curbing spending habits.
“You’ve got to get to the root of what caused (the debt) in the first place,” advises Yih. “If you spend more than you make, how do you deal with that? You either spend less or earn more. There’s no magic to this. It’s a numbers game.”
Equifax Canada considers consumer credit history based on national credit cards, loans and mortgages from 24-million files for its quarterly reports.
