From Steve Chittick of Dominion Lending Certre
Canadians must learn to 'live within their means'
2010-06-08 | 09:05:37
By SHAWN BERRY
The woman in charge of ensuring Canadians have the tools they need to make good financial decisions is concerned.
Ursula Menke, commissioner of the Financial Consumer Agency of Canada, knows that for every dollar the average Canadian earns in a year, they owe $1.47 in debts.
And the number of Canadians carrying a balance over on their credit card every month hovers between 30-40 per cent.
Menke said Canadians are borrowing to spend.
"The fact is that debt-to-income ratio continues to grow and is clearly unsustainable," she said.
"We're trying to get Canadians to focus on that and live within their means. That is what we want people to do."
At the same time Canadians are borrowing to spend, they're really not saving as much for the future or a rainy day, she said.
That can have repercussions when it comes time to retire.
"A lot of people are finding after they retire that they don't have enough money for their retirement," Menke said.
"The long-term repercussions of that behaviour will be felt in retirement."
The lack of savings can also hit those struck by unexpected job loss particularly hard.
"Life happens and Canadians are not in a good position to deal with it."
Menke was in Fredericton on Monday to speak to a national convention of student aid administrators and later met with officials from the provincial government.
"There are areas of deficiency that need to be addressed," she said.
Menke said while most places saw the debt-to-income ratio of citizens fall over the past two years, Canadians continued to borrow spending money.
"I was concerned that we didn't slow down our borrowing. That is not a good thing," she said. "It worries me."
The organization's website, www.fcac-acfc.gc.ca, provides comparisons between the savings and chequing accounts offered by various banks, comparisons of credit cards, a mortgage calculator and other tools, including budget sheets.