Consumer debt has been increasing over time in Canada.
Even in 2020, due to a very resilient housing market and applications for new auto loans, total consumer debt went up by 3.8% to $2.041 trillion in the third quarter of the year!
Equifax Canada shared in-depth insights, drawn from banks and other lenders, in its recent report.
Some of the key findings included:
- In Q3 2020, mortgage balances increased by 6.6% compared to the same time in 2019.
- For the first time, the average new mortgage loan amount surpassed $300,000.
- In Q3 2020, new auto loans were also up 11.7% compared to the same period in 2019.
- Average credit card spending was almost back to the pre-COVID levels during this time period.
- About 12% of new credit products in Q3 2020 were opened by consumers who had some form of deferral on their credit file.
High levels of consumer debt are not sustainable in the long run because they lead to vulnerabilities not only for individuals but also for the economy as a whole.
For instance, if you lose your job or are faced with an unexpected expenditure, it will become hard for you to manage your finances as you already have significant debts to pay off. Similarly, for the economy, as a whole, larger debts can create further problems during economic crises.
This is why it is important to keep a track of your debt-to-income ratios.
So, once you ascertain that you may need to work on your personal finance management, there are some strategies you can put into place.
Four of these key strategies for reducing your debt and ultimately become debt-free are shared below:
I. Have a comprehensive budget in place. This enables you to monitor your monetary inflows and outflows. You are able to gauge how much total income you are receiving from different sources and how many expenses you have.
II. Start small. When it comes to debt reduction, a good way to continue reducing your debt is by taking small steps. This can be by opting for a more cost-effective cell phone plan, preparing home-cooked meals to avoid excessive outdoor dining, and cancelling subscriptions you don’t need.
III. Monitor your debts. This can help you identify high interest debts, such as credit cards, and ensure that you’re paying them off sooner or at least making the minimum required payments. If you have multiple types of debts and believe that repayment could be an issue in the future, you can look into consolidating your debts into a single payment.
IV. Save. It is important to save. You could either choose to invest in programs such as retirement saving plans or set aside a certain percentage of your salary for savings before you start spending and paying your bills.
At DebtCare, we are committed to supporting you in financial planning and elimination of debt. We do this by working with you to identify where you should start, what steps you should take when you should take them, the best mix of options for you, and more.
To date, we’ve helped thousands of Canadians fix their credit, lower their debt, and improve personal financial management. We can help you, too!
Contact us today for a free consultation to start reducing your personal debt. Call 1-888-890-0888 or visit www.debtcare.ca.

When it comes to managing your personal finances, it is essential to keep a track of your debt-to-income ratio.
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