Canadians now owe about $1.64 for every $1 they have in disposable income.
Data released by Statistics Canada last week show that the household debt ratio in Canada reached 163.7% in the third quarter of 2015, up from the 162.7% reported in the previous quarter.
In a news release issued shortly afterwards, Credit Counselling Society CEO Scott Hannah expressed concern about this state of affairs. “We conducted a survey last month which showed Canadians aren’t as financially savvy as they thought, and given that household debt levels are continuing their upward trend, it shows us just how important it is to have basic money management skills,” he said. “If we don’t effectively manage and prioritize our finances, we’re going to make bad money choices.”
Hannah went on to note that a report released by the Royal Bank earlier this month found that Canadian household debt has grown at its fastest pace over the last three years, mostly because of the booming housing market in Toronto and Vancouver. Hannah went on to warn that low interest rates will not last indefinitely, and that Canadians should not be tempted into taking on even more debt.
“It’s easy to get carried away with our spending during the holidays, especially if we don’t know how to manage our money," he comments. "So this holiday season, having a budget really is a great gift to yourself.”
