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Debt is a disease, and Canadian have it. Debt has risen seven times faster than incomes in the past four years.
Canadians now owe $80,000 per household, or 131% of our average household income. In 1990 it was 90%.
Of course, a lot of that debt is mortgage and car loans. But, a lot of it is not. The average household has $22,500 in credit card debt for example.
If this is you, and you have equity in your home, talk to a mortgage planner about rolling your high-interest credit cards into a new low-interest mortgage or credit line. Then take this spending test to get a handle on your finances.
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Side bar: Since 1990, the average Canadian’s net worth has risen faster than their debt, but that’s largely on the back of rising house prices. What happens if: a) we can no longer depend on annual home price gains to finance our spending; or, b) our incomes can no longer service our rising debts?
