“There’s been a lot of talk this year about us Canadians and our debt. And a lot of that talk has revolved around how we know just how much debt we have and that we’re not worried about it. But, do we really know how much debt we’re currently holding? And if so, why aren’t we doing anything about it? Although we might think we are, a recent report from Manulife Bank shows otherwise.
The report was published earlier this week and the results might be troubling for those of us that think we’re paying down our debt. Included within was TransUnion’s statistic of $25,594 (excluding mortgage debt) that they had released in the third quarter of the year, along with the fact that the number was down $9 from the quarter before. But is $9 enough in three months? And if the quarterly stats say that our debt is going down, isn’t that in fact just what it’s doing?
Truthfully, the $9 we saved per person in the third quarter isn’t a very large number, especially when you consider the large amount of debt we have per person. In addition to that, the Manulife report also lays out nearly every debt-reducing strategy Canadians have available to them – before it points out that we’re simply not using them.
Debt consolidation through a HELOC and second mortgage loans is a great way to reduce debt, especially when interest rates are so low throughout the country right now. But, 43% of Canadians are not using them, and don’t plan on it either. Increasing the amount you pay on your monthly mortgage is an obvious and fantastic way to get rid of debt faster, simply because you’ll be paying it off faster (and paying less interest in the meanwhile.) But only a very small minority – 30% – actually did that this past quarter. And it’s not just our current debt we’re not worried about, either – it’s future debt too. The report also showed that 55% of Canadians said that they would not be seeking the services of a financial advisor to help them with their debt.
So what are we to do about it? Doug Conick, president of Manulife, says it’s just a simple matter of educating ourselves about the options available. At the time of releasing the report Conick also stated, “Many Canadians have told us they are unable to pay down their debts as quickly as they would like because they don’t have the money, their interest rates are too high, or they have too many debts to deal with effectively. Canadians should be aware there are a variety of actions they can take to reduce their personal debt more quickly that don’t take a lot of time or effort.”
Are you comfortable with the amount of debt you have? What strategies are you implementing to pay it off?”
