Coexisting with chronic debt levels is no longer a frightening concept for Canadians – and the majority of us are doing it. According to a recent poll of 1,010 Canadians, saving for a rainy day has taken a back seat to simply extending a line of credit or charging to plastic.
Failing to Realize Credit Realities
The poll, which was run by bankruptcy services provider Hoyes Michalos and Harris/Decima, questioned Canadians on their ability to raise $2000 within a month should a financial emergency arise. The results showed that while 55 per cent of respondents feel extremely confident they could raise the cash in time, 92 per cent would also consider borrowing it. Not only does this show Canadians fail to flinch at the prospect of taking on debt, but there’s a stark disconnect between our perceived access to wealth and actually living within our means.
“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,” says Ted Michalos, a bankruptcy trustee with Hoyes, Michalos & Associates Inc. in a release to the press. “The best advice we can offer all Canadians is to make a plan now to deal with emergencies and start paying down debt today.”
In addition to these findings, the poll also showed that one in five Canadians would take longer than two months to come up with the emergency cash – and 26 per cent wouldn’t be able to raise it at all – an alarming indicator that our laissez-faire attitudes to credit are finding us increasingly financially over extended. Our levels of debt are also going up – one in four respondents said theirs is higher this year than last.
What’s even more disturbing than the growing ranks of the financially-strapped, however, are those blindsided to the issue entirely. Sixty two per cent of respondents actually reported being comfortable with their financial standing, and another 45 per cent say they’ve never had a debt problem.
Truth In Numbers
Probably the most telling numbers unearthed by the poll point to our required areas of improvement. A full 70 per cent of respondents reported an immediate need for help on their day-to-day finances – another indicator that relying on credit has become too commonplace.
They also highlighted their top financial challenges, with sixteen per cent claiming their main focus was on improving savings, and 13 per cent identified improving their cash flow. Only 20 per cent said debt pay down was a top priority. No wonder our credit card balances are sticking around!