If Canada’s household debt were evenly divided up between all Canadians, a family with two children would collectively owe $176,461. A bit of scary information, isn’t it?
This statistic was recently revealed in a study conducted by the Certified General Accountants Association of Canada. Household debt, defined as the outstanding balance of household credit, including consumer credit and residential mortgage credit, reached a record high of $1.5 trillion in the first quarter of 2011.
What it’s all saying is that many Canadians are living beyond their means – much beyond their means.
Consumer debt troubles surfaced when Finance Minister Jim Flaherty announced earlier this year that personal debt is getting out of hand at a whopping 148 per cent of the average Canadian income. This realization prompted a handful of mortgage lending changes, including a five-year reduction of the maximum amortization period for government-backed insured mortgages from 35 years to 30, a lowering of the maximum amount Canadians can borrow to refinance their mortgages from 90 per cent of the value of their homes to 85 per cent and no longer insuring government guarantees on lines of credit secured by homes.
But mortgages aren’t the only problem. Households are spending more than their inhabitants can afford on luxury items such as big-screen TVs, new vehicles and high-end furniture. During the recent economic downturn, the government even pleaded with consumers to spend more money, at the same time as some lost jobs or took pay cuts.
Fifty-eight per cent of consumers are concerned about their debt loads, according to an RBC Canadian consumer outlook index released back in January. The study also found that Canadian consumers average $13,000 in personal debt, excluding mortgages.
However, debt is not the nail in the coffin. As long as consumers have the desire to right their financial woes and take hold of their financial reigns, there is hope to bring these numbers down and to live comfortably without the constant looming cloud of debt.
We would like to help you save your precious dollars. We want you to own your own home faster and more conveniently, along with paying off any other debts weighing on your shoulders. The answer may be simple software to help consumers deal with debt. It’s called Interest Blocker and it allows you to manage your money, manage your debt and manage your mortgage, giving you the power to pay it off in half the time.
It’s an easy-to-use, online solution that tracks every dollar that goes into your bank account and every dollar that goes out. It allows you to use your own money to pay your mortgage and credit card debts down in a strategic and manageable fashion. It’s confidential and it’s free. Just sign up on our Facebook page.
That scary statistic doesn’t have to be you. Avoid paying extra interest and becoming just another statistic. Use the savings Interest Blocker helps you free up to pay off your debt faster and more efficiently.