Three quarters of Canadians carry some debt but for a large share they rely on it for the things they need.
A new report from financial recovery service BDO Canada reveals that a quarter of those with debt find it so overwhelming they don’t know what to do.
Mortgages and credit cards make up the bulk of the debt Canadians have but the inaugural BDO Canada Affordability Index shows that non-mortgage debt averages $19,977.
"It's no surprise that Canadians are overburdened by debt, but what our Affordability Index sheds light on is how serious the affordability challenges are for so many Canadians," says Doug Jones, president, BDO Canada's Financial Recovery Services practice. "This lack of affordability suggests that a significant group of Canadians rely on various forms of debt to cover their spending and many find themselves feeling lost and overwhelmed by this debt. But the good news is a Licensed Insolvency Trustee can help them navigate these waters."
Debt inequality
The debt burden is not evenly distributed with women carrying more than their fair share.
The poll finds that women face bigger challenges than men to:
- Save for retirement (73% vs. 65%)
- Save for a major purchase (74% vs. 64%)
- Afford transportation costs (43% vs. 36%)
And they also carry a heavier debt load (52%) than men (45%).
Nearly 1 in 5 millennials say they will delay starting a family due to their debts.
Women and millennials are more likely than the general population to say they are poorly or terribly prepared for buying a home (56% total; women 62%, millennials 64%).
Children can’t afford to leave home
Many families may be financially burdened by adult children continuing to live at home. Nearly one-fifth (18%) of Canadians have a child over the age of 18 still living at home and three-quarters (76%) of those families say it is because it is too expensive for the adult child to rent.
