Amid high inflation in Canada, which peaked in June at a staggering 8.1%, a new survey has found that many Canadians are now turning to debt to cover their expenses. their costs.
July saw the national inflation rate drop slightly, down 5%. According to a survey published on August 16 by Finder.com, a personal finance comparison website Finder.com.
Carrying debt to pay the bills often means taking out personal debt. According to the survey, which asked more than 1,000 Canadians about how they deal with inflation, one in four admitted to doing so to cover costs.
It also shows that about 7.3 million Canadians over the age of 18 have used loans or other forms of debt to keep up with inflation.
TOP REASONS FOR LOOKING
Survey respondents listed paying bills, gross debt, and covering living expenses after losing a job as the most common reasons for being in debt.
But other important expenses such as buying a car, education and home improvement don’t fall too far behind.
This has resulted in many Canadians reporting a reduction in spending. Nearly 60% said they’ve spent less on luxuries like clothing or entertainment, while 43% said they’ve reduced the amount they spend on big purchases like remodeling or traveling.
“Middle-income people are really struggling,” Romana King, senior finance editor at Finder, said in a statement.
“The data shows that wages are not keeping up with the higher cost of living and this puts middle-income earners – most Canadians – in a difficult position. It forces many people to start prioritizing spending. their expenses and find a way to make a living.”
CHILDREN CANCER BECOME MORE
While the rising cost of living is affecting all age groups, the youngest adults in Canada are being hit hardest, the survey found.
Among respondents, 27% of millennials aged 27 to 41 reported taking out a loan to pay their expenses, followed by 26% of Generation Z between the ages of 18 and 26.
The survey also found that 27% of Generation X respondents, aged 42 to 56, also took out debt to combat inflation.
Fewer and fewer new-borns fall into debt, with only 18% saying they’re taking on debt to cover expenses. However, this is also the group that cut spending the most, with 66%.
HOUSING COSTS IS LEADING TO MANY GROUPS OF FINANCIAL COMPETITIVES
Many Canadians listed housing costs as their top concern when asked how much inflation affects their entire household budget.
By 2022, 1.3 million people over the age of 18 – about 4% of Canadians – say they are experiencing a delay in their rent or mortgage.
The ambient survey found that renters are more at risk than homeowners with mortgages, with 9% of tenants estimated to be late on payments, as opposed to 6% of homeowners.
Generation Z respondents are four times more likely to consider moving to have lower housing costs than Boomers, at 12% versus 3%.
“It’s easy to feel overwhelmed when inflation raises the cost of living,” King said, adding that cutting unnecessary expenses could save most Canadians about 15%.