Over one-third do, according to the latest findings from the 2023 Consumer Debt Report.
NEW WESTMINSTER, BC, Jan. 31, 2023 /CNW/ – Hardly a month into 2023 and Canadians are already facing a financial avalanche of skyrocketing costs along with increasing debt loads. The strain and mounting pressure are leaving many consumers in a state of anxiety and pessimism about their financial situation. Those were some of the findings of the 2023 Consumer Debt Report by the Credit Counselling Society among members of the Angus Reid Forum. Surveyed on their financial health and perceptions of financial assistance, and how they were managing their savings, debt, and other financial issues, Canadians were not very optimistic in their responses.
Facing a host of financial challenges, it’s surprising that six-in-ten Canadians do not anticipate a change in their lifestyle if inflationary pressures continue. However, many are struggling to stay afloat as interest rates, debt levels, and financial anxieties continue to rise.
“It’s alarming to see how much financial pressure Canadians are facing this year,” remarks Scott Hannah, President & CEO of the Credit Counselling Society. With the cost of essentials increasing the way they have, a significant number of people are running out of options when it comes to making ends meet.”
The report found that to manage increasing expenses, two-in-three Canadians carrying non-mortgage debt actually had to take actions that hurt their finances. These actions included cutting back on savings (35%), drawing from savings (41%), and using credit instead of cash (36%). Another one-in-ten (10%) of respondents, claimed they were either unable to keep up with minimum payments or were deferring payments.
Even though Canadians are facing significant financial struggles, many continue to have predominantly negative associations with reaching out for financial help. “It may seem counterintuitive,” explains Mark Kalinowski, a Financial Educator at the Credit Counselling Society, “but there is still so much stigma around talking about money – debt in particular, that many people try to avoid it altogether, which just compounds the problem.” Younger Canadians (18-34) especially, were more likely than other groups to say reaching out for financial help would make them feel inadequate (27%), helpless (26%), out of options (43%), or [like a] failure (27%). What’s more surprising is that Canadians with the highest debt loads feel the worst about reaching out for financial help. With an unprecedented amount of pressure on Canadians’ finances, Kalinowski adds “That’s why it’s absolutely crucial, to reach out if you need help. Waiting will not improve the situation and can impact other areas of your life.”
The report also reflects the impact the economic reality is having on the mental health of Canadians. Three out of every ten (30%) are feeling pessimistic about their financial situation, and very few are feeling fully optimistic heading into 2023.
“Those ongoing financial struggles are not just straining people’s budgets,” points out Anne Arbour, the Director of Strategic Partnerships and Education at the Credit Counselling Society. “The constant worrying, and stress is impacting people’s mental health, especially if they don’t know that help is available.”
With a significant number of Canadians struggling financially, the Credit Counselling Society’s message is clear. “You do not need to feel ashamed about your situation,” Hannah says, firmly. “You do not need to be afraid to ask for help. Trusted and professional help is available often just a phone call away.”