Oh, the lingering sting of debt. It’s there when you tally the cost of your groceries in your head as you wait in line at the supermarket. It’s there as a pit in your stomach in the lead up to Christmas – that sacred day of consumerism. It’s gut-wrenchingly isolating at times – a dose of decapitating fear to start the morning with and enough to keep you up at night.
Most of the time, debt feels like a personal prison, something unfathomable by those around you. But it seems many Canadians are in the same place, according to the third annual RBC Debt Poll. Less than a quarter (24%) of Canadians surveyed are living debt free, compared to 26% in 2012 – pushing the national personal debt average to $15,920 in 2013. Last year’s personal average stood at $13,141.
Who has the most debt?
Looking at Canada as a whole, Albertans carry the highest average personal debt of $24,271 – mostly as a result of the devastating flood the province experienced earlier this year.
In Ontario, the average debt is $17,416, followed by British Columbians who carry $15,549. In Atlantic Canada, the average personal debt in 2013 is $15,243, while Saskatchewan and Manitoba follow close behind at $15,165. Quebec seems to be the most frugal at $10,458.
Half of respondents say debt levels cause anxiety
The poll shows that anxiety surrounding debt is an even split among Canadians. While 38% admitted they were very anxious (a rise from 34% in 2012), 38 per cent said they were comfortable with the level of debt they had reached.
“Despite the rising debt figure, there is a noticeable trend to responsible debt behaviour over the past year,” says Kim Taylor, director of personal lending at RBC. “We are also seeing that others need to take a step back to better manage the debt they are carrying.”
Taylor likens hashing out a plan for beating debt to establishing a fitness regime.
“Before you start on any new routine, it is always best to set goals and have a plan in place,” she says. “Marathon training often begins with a 5k race, and a financial plan with a path to debt repayment is key to your financial fitness success.”
How to break the debt cycle
Want to get financially fit? Here are a few tips:
Put it on paper. Write down exactly what you owe. Tally up your line of credit, outstanding credit card payments and loans – student-related or otherwise.
Have a plan. Once, you can see the full scope of what you owe, decide what monthly payment you can comfortably make and stick to it. It helps if you have a budget blocking out your monthly expenses including rent/mortgage, bills, groceries and entertainment costs.
Stick to it. When the plan is in motion, stick to it. Re-evaluate in a few months to make sure you’re balancing your needs and your payments.
If you’re having trouble making it all flow, contact a financial planner for advice. And remember, debt doesn’t need to be a secret -- be transparent and seek out support when needed.