More than half would struggle if bills increased by $300

par Andrew Rickard | January 19 2016 01:31PM

If their monthly debt payments were to increase by a few hundred dollars, many Canadians would have trouble making ends meet.

A survey conducted for BDO Canada has found that many people are living on the financial edge; 46% of respondents admitted that they would experience difficulties if their monthly debt payments were to increase by $200, while 62% said they would be in trouble if their bills went up by $300 a month.

Asked about the direction they expect interest rates will go, 51% think they will go up, 10% say they will go down, and 39% anticipate no change. However, the poll found that most respondents were still optimistic about 2016: 49% believe their overall debt levels will be better by the end of the year, and 44% expect their net worth to be higher by December.

"While we are encouraged to see that many Canadians are optimistic about their abilities to pay down debt and grow their net worth in the coming year, the low tolerance for Canadians' household budgets to handle fairly small increases in monthly payments remains a worry," says BDO president Doug Jones. "With our debt-to-income ratio already at record high levels, it is worrisome to hear that 40% of Canadians anticipate they will not be able to reduce this in the year ahead".