Monday, December 15, 2014

Interesting fact without comment: Household Debt in Canada at all-time high

In the third quarter which just ended, the household debt-to-income ratio of Canadians hit an all-time high. According to Stats Can the ratio hit 162.6 percent up from 161.5 percent in the previous quarter.
The Bank of Canada has expressed concern Canadians may be taking on too much debt. The Bank is monitoring the ratio and watching for signs consumers being overextended. Bank of Canada Governor Stephen Poloz forecasts household imbalances, caused by high levels of debt and a hot housing market, should fall gradually as the economy strengthens.

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.

No comments:

Post a Comment