Average Canadian household debt article.

[MomToTwoBoys]

http://www.ctv.ca/servlet/ArticleNew...b=TopStoriesV2

How does this compare to other countries in the world?

We have the mortgage and about $10k in debt, with 3/4 of that being the loan from the inlaws (we just paid $600 onto that today).

How do you fair? Are you way more, way less or just about even?

One point that stuck out to me was this:

The personal savings rate rose from about 2 per cent to nearly five per cent in the last four quarters, the study reports.

[monkeywrangler71]

The article is quite alarmist without conveying much real information.

"Mortgages over 90 days late are up 50% from 2008" - sounds like the sky is falling, but actually means nothing without the 2008 numbers to compare it with. The current rate of arrears - 0.44% - extremely low for a recession. And mortgage regulations are about to get tighter again.

$96000 of debt - what percentage is mortgage and what percentage is consumer debt? Considering the cost of homes in most of the country, that's not a huge amount to owe on a house. Again, with the 145% of income stat - not a tremendous debt load if it's your house, especially for a relatively new homeowner. Someone with a $66000 salary having a $96000 mortgage seems pretty okay to me.

[MaryCarney]

Clark Howard did a VERY interesting bit on his radio show last week which compared the current financial crisis in the US to Canada.
His main point was that Canadian government policies on banking and lending have largely prevented the problems we have seen here with foreclosures and bank failures. I'm sure his website (www.clarkhoward.com) will have this somewhere - it was either last Thursday or Friday's show (I listen on my way to one particular client's home, and those were the days I worked last week)
I cannot tell you exact numbers, of course, but his point was that in Canada you must come up with a significant down payment to purchase a home and bank cannot loan nilly-willy like they have in the US.
Also, banks and financial institutions must keep a much larger percentage of their holdings in CA$H, many times more than here.
I LOVE his show for the most part - he is rather enamored of keeping credit cards, but his background as a self-made millionaire in the travel industry gives him wonderful insights into discounted travel and vacations. And just listening to him talk about his employees, he really knows how to run a business. Oh, one more reason I like him - after September 11 - he enlisted in the Georgia Guard - at age 45 with no previous military background - I really admire that he put shoe leather to his patriotism!!

[JanieD]

The article has some interesting points, but seems to be missing some information to give us a complete picture. I found the sentence regarding 2/3 of Canadians people age 18-34 finding themselves in trouble if their paycheck is a week late surprising. I'd would have guessed lower, maybe 40-50%. However, I'd expect this to be true in the US as well (maybe even higher), but haven't researched the matter. Many are living paycheck to paycheck, seem unable to save even a small EF & will continue this "lifestyle". Until this issue changes, I feel debt will remain a problem/solution (depending on how you look at it) for many. Just my 2 cents for what its worth.

[mama2James]

I was taken aback by the same statement as JanieD, it's so sad to me how many people don't have even the equivalent of a paycheck in the bank. How can people live like that without going crazy from the anxiety?

[bumplett]

Mary ~ I'm a Clark fan also.

as for the article, I honestly don't think it had enough factual details to even form an opinion - it sounded rather chicken littleish to me.

I think we're all in the same boat - some will drown, some will swim, but that's life - it's always been this way - some of us have just never experienced holes in our boats before now. :shark:

[Wendy99]

I was taken aback by the same statement as JanieD, it's so sad to me how many people don't have even the equivalent of a paycheck in the bank. How can people live like that without going crazy from the anxiety?

They do go crazy from anxiety!! We have maybe 1/3 of a paycheck in savings & live paycheck to paycheck. It is hard, won't deny that. Our debt isn't overly high but our income is low so that makes the debt high for us. We're working on perfecting our spending habits and noting where everything goes right now so we can perfect our budget.

[MomToTwoBoys]

They do go crazy from anxiety!! We have maybe 1/3 of a paycheck in savings & live paycheck to paycheck. It is hard, won't deny that. Our debt isn't overly high but our income is low so that makes the debt high for us. We're working on perfecting our spending habits and noting where everything goes right now so we can perfect our budget.

Yeah, this is sort of how it is in our house. DH told me not to worry about giving him extra money, yet we need to look at saving soon for retirement. We're still paying over $400 onto debt per month, so we're doing ok. It's not like either of us have huge spending habits to tame, either. We just learn to tighten the belt more lately than in the summertime, since DH gets more OT then and we have more flexibility to put into savings.

The winter months are always tight for us. It's been this way since we started budgeting about two years ago. We haven't had many instances of going into overdraft (I think maybe two in two years, as opposed to every month for the five years before that) so we're not overly hurting for money.

DH had $126 of OT cash this check and will have more next check. We're using that extra cash to make ourselves more comfortable and to put some extra money out of my checking into savings. We always scrimp and save where we can.

We aren't overly anxious, per se. What we are is more mindful of what we're spending our money on. I tell DH I want to make fixes around the house and he tells me that we can't because there's no money. I'm concerned that it's going to stress our relationship out, but we've been through a lot worse.

We found out that by 45, we should have $121,900 invested into retirement (this does not include OAS, CPP and my VA pension) and then $500k by 65. Our mortgage should be paid off by the time we retire, so we'll have that burden off our backs. Hopefully, we can get into some good money practices now so that we won't have to live paycheck to paycheck in the near future.

[mama2James]

I was taken aback by the same statement as JanieD, it's so sad to me how many people don't have even the equivalent of a paycheck in the bank. How can people live like that without going crazy from the anxiety?

I reread my post and I just wanted to clarify, that I wasn't meaning to sound judgemental of people who live paycheck to paycheck. DH and I have been there too. My surprise was more about the article stating that 2/3 of 18-34 yr olds in Canada are in that situation. I didn't realize it was so incredibly common, because it seems like something people would be worried enough about to try to fix if at all possible. Being around the group of people here at FV, where were are all trying to make sound financial decisions and improve our situations, I "forget" that so many people are just trying to survive and not thinking about this stuff like we all are.

[monkeywrangler71]

The article has some interesting points, but seems to be missing some information to give us a complete picture. I found the sentence regarding 2/3 of Canadians people age 18-34 finding themselves in trouble if their paycheck is a week late surprising. I'd would have guessed lower, maybe 40-50%. However, I'd expect this to be true in the US as well (maybe even higher), but haven't researched the matter. Many are living paycheck to paycheck, seem unable to save even a small EF & will continue this "lifestyle". Until this issue changes, I feel debt will remain a problem/solution (depending on how you look at it) for many. Just my 2 cents for what its worth.

Unfortunately, 18-34 is a demographic group heavily weighted in students, people just starting out in their careers, and first-time homebuyers. They tend to have higher than average debt loads and lower than average incomes. The numbers for 35-54 year olds would have been a much better indicator of whether or not there is a serious problem.

[Imarachne]

No matter where we live, there is room for improvement in our consumption of resources. That's why I love this forum because there are soooo many different situations and solutions to learn from. Here's hoping we will all endure this mess !!