Plan Ahead: How Much Debt Is Too Much?

The low interest environment we have been enjoying for over the past few years has had many benefits for Canadians. Owning a house has become much more affordable. It has enabled people to do more, pay less and finance major projects sensibly. “Borrowing” is no longer a negative word but often a smart option that helps people achieve important life goals.

Nearly half carry a monthly balance

The first credit card ever was introduced in 1950 in the United States. In the early 1980’s, there was less than one credit card per adult in circulation in Canada. Today, however, there are over 50 million credit cards in circulation in Canada – an average of more than two per adult. And nearly half of those credit cards carry a balance month to month!

A recent report from the Vanier Institute of the Family says total household debt is now equal to 121 per cent of disposable income, compared to 86 per cent in 1980. It also says that household savings rates have dropped to “zero, zippo, nothing.”

We’ll help you get a grip

It’s important to ask yourself what would happen if interest rates rose significantly or if house prices suddenly dropped. And if you have concerns that your personal spending is getting too high, here are some important questions you may want to ask yourself:

• Am I at, or over, the limit on my credit cards?
• Am I paying only the minimum amount on my loans and credit cards every month?
• Am I starting to pay my bills late?
• Am I using more and more of my paycheque to pay my debts?

If you answer “yes” to many of these questions, you’re probably not sleeping as soundly as you should at night. The Credit Union can work with you to take away the worry. We can assist you with budgeting, consolidation loans, setting long term goals and starting a savings plan. Whatever it takes to help you feel more in control of your finances!