Despite the record high debt-to-income ration, the ability of Canadians to service their debt has improved thanks to interest rates remaining low. The interest paid as a proportion of disposable income fell to a record low 6.8 percent in the past quarter.
Personally, I hate debt. I take it on when I must but I attempt to pay it down as quickly as possible or, at least, keep the payments low and non-threatening. I track all my expenses by charging the vast majority of purchases and paying the entire bill monthly. I have a budget and my monthly MasterCard bill tells me whether of not I am keeping to my budget.
Right now I am preparing my budget for 2015. I have cut my spending and trimmed my savings plan due to the fall in oil prices. My dividends are threatened. My income may suffer but I will be just fine. I'm prepared -- I hope.