Let’s face it: debt is a part of many people’s lives. But what is too much? The statistics on household debt in Canada may surprise you.
Average Household Debt in Canada
According to a recent report, the average Canadian household, excluding mortgages, owed a whopping \$73,500 in debt . This figure has steadily risen over the years, leaving many Canadians feeling overwhelmed and stressed about their financial situation.
Types of Debt Canadian Households Hold
Debt is like an unwanted guest who never leaves. But have you ever considered the various types of debt you may be carrying? Here is a breakdown of the most common types of debt held by Canadian households.
The average Canadian owes around $200,000 in mortgages. It’s like having a huge love affair with your house. You’re in it for the long haul, but it’ll be worth it!
2. Credit Card Debt
Canadians owe an average of $2,121, this is the devil in disguise because it always appears to be a good idea until the bill arrives.
3. Lines of Credit
They’re like a reliable sidekick in that they’re always there when you need them, but they can quickly spiral out of control if you’re not careful.
4. Car Loans
You finally got the car of your dreams, but now you’re literally paying for it.
5. Student Loans
The cost of knowledge, but is it worth it in the end? Personal loans are the jack-of-all-trades, capable of assisting you with everything from home renovations to medical bills.
That’s all there is to it! The various types of debt that Canadian households have. Just remember to keep track of all your debts and create a plan to pay them off in a timely and manageable manner. After all, a debt-free existence is a happy existence!
3 Ways to get out of Household Debt
- First and foremost, create and stick to a budget. Keep track of your spending and look for areas where you can save money. This will not only assist you in getting a handle on your debt, but it will also provide you with a better understanding of where your money is going.
- Following that, prioritize your debt repayment. Paying off the debt with the highest interest rate first will save you money in the long run. And, if possible, make more than the minimum payment each month to reduce the amount of interest you’ll pay over time.
- It’s also critical to seek assistance if you’re feeling overwhelmed. Credit counselling and debt management services can offer you the assistance and guidance you require to get back on track.
To summarize, while the average Canadian household debt may appear daunting, there are steps you can take to reduce your debt and improve your financial situation. You can regain control of your finances and secure a brighter financial future by being proactive and seeking help when needed.
If your debt-to-income ratio is higher than 43%, you are considered to have a lot of debt in Canada
- 18-25-year-olds have around $8,129 of debt on average
- 26-35 year old Canadian is now $16,832
- 36-45-year-olds owe about $25,084
- 46-55-year-olds tend to owe the most at around $31,442
- 56-65-year-old, it is normal to have about $26,165 in debt
- 65 and over are sitting with $14,386 owing
Canadian households owe \$1.83 in debt for every dollar of household disposable income, which is one of the highest in Canadian history