How Canadians are Coping with the Rising Cost of Living

The Rising Economic Heat

For many Canadians, the economic climate has been increasingly challenging. They are feeling the economic heat with rising inflation, increasing interest rates, and higher levels of debt that are taking a toll on their finances.

In the early stages of the pandemic, the Bank of Canada made a drastic move to cut interest rates close to zero. However, in an attempt to control inflation, which has reached its highest level in years, the Bank has reversed course. Over the past year, the benchmark interest rate has been raised eight times. This has made borrowing more expensive and increased the financial burden for many households.

In addition to this, consumer debt has also seen a significant rise, reaching a staggering $2.36 trillion. The average non-mortgage debt per consumer is now over $21,000.

The Impact on Canadians

The economic pressure is being felt by Canadians from all walks of life. However, those with lower incomes and those who are carrying debt are feeling the pinch more acutely.

According to a recent survey, over a quarter of Canadians (27%) state they cannot manage any further increases in their monthly living expenses and financial obligations. This sentiment is shared more by low-income households (earning less than $50,000 annually) who are over twice as likely as high-income households (earning over $100,000 annually) to express this concern.

The Impact of Rising Costs in 2023

84% of respondents are worried about the impact of increased costs on their expenses and financial obligations.

69% have had to cut back on non-essential expenses.

32% have even had to reduce essential spending, such as groceries and medication.

27% of respondents cannot manage any further increases in their monthly living expenses and financial obligations.

Strategies for Financial Stability

In these tough times, it is crucial for consumers to focus on what they can control rather than what they can’t. Budgeting, limiting non-essential spending, and paying off debts are some of the steps that can be taken to ensure future financial stability.

How to Navigate Through These Challenges

If you are among the many Canadians struggling to manage increased living expenses and debt, there is help available. You can book a free, no-obligation consultation to learn more about your options and how to cope with the rising cost of living.

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