Canadian households continue to struggle with rising debts and managing their budgets, meaning a further rise in debt is likely in 2020.
According to the latest MNP Consumer Debt Index released Monday, 3 in 10 Canadians say that they are already insolvent and half say that they are $200 or less away from being insolvent at the end of the month.
Almost half of respondents said they aren’t confident they will be able to cover their family and living expenses without going further into debt this year, up 2 points since the end of the third quarter of 2019.
“Our findings may point to a shift among some Canadians from debt apathy to debt hopelessness,” says Grant Bazian, President of MNP Ltd. “Feelings of hopelessness can make people feel like giving up on ever paying down their debt or, worse, ignoring the debt as it piles up higher.”
Only 27% of respondents were confident that they would be able to cope with an unexpected expense without increasing their debt load.
Bazian says that going further into debt is a recipe for trouble especially with house prices rising. He urges those struggling to get professional help.
“Anyone using any kind of credit to make ends meet should sit down with a licensed professional to review their finances, create a budget and make sure they have a plan in place that will allow them to weather rainy-day expenses,” he said.
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