While I have continued to discuss various financial topics that have affected my family as well as the lives of my friends and their families – I would like to look at how bad credit situations have impacted the lives of individuals from a Canadian perspective.
Spanning over the last 5 to 10 years, many Canadians have continued to struggle with regards to their financial situations. Like many of us, they’ve find it difficult to pay off their bad debt. However, now more than ever, it’s so important to make paying off bad debt a top priority.
Across many Canadian provinces, unemployment rates have continued to sit at high levels and other global economies that influence the economic stability in Canada, are still feeling the effects of the recession. While it is true that Canadians have not been the most greatly affected compared to other nations, the reality is that there are many financial issues that have greatly contributed to the onset of a bad credit epidemic.
Despite the fact that many Canadians are aware of the current economic climate, this does not appear to deter them from spending and increasing their debt levels. This perhaps can be directly related to various bad credit behaviours that do seem to differ slightly from province to province. Taking an even closer look at these adverse behaviours can perhaps be traced back to specific sources of debt accumulation.
Across the country, there is a common thread that relates to how many Canadians are spending and in turn falling further into debt. Sources of debt typically include, purchasing expensive assets such as cars, buying a home, and for higher education. While some big ticket items might be classified as needs – others are more likely to be considered wants. Overall, many individuals continue to live beyond their means and this quickly translates into extreme debt situations.
The scope of the debt situation can also be identified by looking at the specific debt levels across the individual provinces. According to RBC, the two provinces that are currently experiencing the lowest amount of debt accumulation per person are Saskatchewan and Alberta. Compared to Saskatchewan’s $325 surplus calculation, the provinces with the highest level of debt surplus are in fact Quebec and Ontario. At this time, Ontario’s deficit currently sits as high as $955 based on Ontario resident’s debt levels.
What accounts for the discrepancy in these numbers?
There are a variety of factors that are likely to influence these provincial rankings and are unique to each area. Particularly in Ontario and Quebec, the job opportunities appear to be more competitive compared to other provinces, perhaps due to the higher populations. The standard of living in many provinces, also makes it more likely that Canadians will go into debt while borrowing more for example, in the case of higher mortgages. Also associated with the high cost of living in these provinces, is the fact that more of their monthly income goes towards food, hydro, and transportation.
With this said, it is also important to mention that even if you are living in a province that reflects either an overall low or high debt category – this does not necessarily mean you will be a part of this average. For example, if you are living in Saskatchewan, you may still find yourself in a bad credit situation, despite the lower debt average. Likewise, not all Ontario residents will be living with extremely high debt. Ultimately, as many Canadians do continue to borrow more and more, perhaps before interest rates go up – the Bad Credit Landscape across Canada will on average reflect a negative credit perspective.
The key here, however is to ensure you examine your current financial situation. If you are struggling with bad credit, you will want to take steps to lessen your debt load. Gathering information and educating yourself about how to manage your credit position, for example from the Bad Credit Blog as well as through other financial sources will help you improve your overall financial circumstances. Additionally, seeking out some of the many credit counseling services, which are available across Canada so they can provide you with further support.
