GreedyRates Canadian Spending Report Reveals Large Household Debt Amidst Spiraling Living Costs
Greedyrates, a leading personal finance site, has released a report examining the past decade of Canadian spending habits. The report found that Canadians are feeling overwhelmed as burgeoning debt looms over the population and the rising costs of housing, childcare, food, and travel is heavily contributing to Canadian normalization of a dependence on debt.
The white paper study was conducted by GreedyRates in late 2020 with research accumulated from a variety of sources, including official government statistics, surveys, and independent media analysis. The survey highlighted that Canadians are struggling with unprecedented economic uncertainty as they try to cope with a constantly changing financial landscape. Many are struggling with increasingly expensive necessary expenditures while also often tempted by everyday indulgences like eating out at restaurants and international travel. The report found that the measure of household debt to disposable income now stands at 155%.
As basic living costs continue to rise, Canadians are increasingly forced to choose between servicing their debt and adding to their savings, or covering the cost of necessities such as housing and education – the cost of childcare alone rose as much as 20% in some Canadian cities in only three years. With a record-setting amount of household debt, the report found that many Canadians are living paycheck to paycheck – a reality primarily due to childcare expenses becoming increasingly burdensome, the weakening Canadian dollar, and the rising food costs of meat, fruits, and vegetables.
While COVID-19 pandemic is set to overturn existing trends, such as high housing costs, other trends will be significantly exacerbated by the economic ramifications of the pandemic. While some Canadians have been able to use the pandemic to reduce spending and chip away at personal debt—thanks, in part, to significant government aid and loan deferral programs—others may soon find themselves more strapped than ever, and possibly out of options.
“Personal finance advice and analysis is a critical factor to helping Canadians navigate their debt and financial challenges,” said Danit Ianovici, Head Editor of GreedyRates. “COVID-19 has inevitably exacerbated the financial situation of many, and it is crucial that people are equipped with the knowledge they need to get out of debt and better prepared for the year ahead.”
Other findings of the report include:
- A third of Canadian households rent rather than own their homes.
- Almost half of Canadians reported that cutting back on spending is a priority.
- More than 60% intend to eat less often in restaurants.
- 29% have expressed concerns with having children due to costs.
The full report can be downloaded from the GreedyRates website here.