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Albertans increasingly concerned about personal debt and paying it off

Albertans grow more pessimistic about financial future in light of growing debt
WATCH: Albertans are becoming more worried about their debt levels in the short- and long-term. Tomasia DaSilva reports.

A growing number of Albertans don’t see any relief in sight when it comes to their current debt and even fewer expect their future debt situation to improve.

“Albertans are increasingly pessimistic about their personal finances,” said Donna Carson, a Calgary-based licensed insolvency trustee with MNP LTD.

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According to the latest MNP Consumer Debt Index, Albertans’ confidence in their financial futures, a year down the road, dropped 12 points since September. That’s the largest decrease any province in Canada saw.

When comparing their current debt to five years in the future, net confidence declined 16 points, once again the largest decrease in the country.

“It’s everything. It’s the economy, it’s helping family, it’s ‘I’ve run out of savings,’ it’s ‘I got laid off,’” Carson said.

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READ MORE: More Albertans suffering in insolvency silence

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The index also showed 28 per cent of Albertans said they were already unable to meet all their monthly financial obligations.

That rose to 47 per cent when factoring in those who say they are $200 or less away from being insolvent at month’s end.

“It’s quite a jump. A lot of people that are borderline are feeling things are really tight,” Carson said.

Almost half of respondents also said they weren’t confident they will be able to cover their family and living expenses without going further into debt this year.

“I’m deeper in debt now than I was last year and I just keep going deeper,” Calgarian Patrick Simpson told Global news.

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“Everything is more expensive. Fuel keeps going up, food keeps going up. The only thing not going up? Wages.”

Simpson said he is doing what he can to get his debt under control, but there’s only so much he can do.

“I’m trying to spend less. That’s about all I can do right? Try to cut back on things.”

WATCH BELOW (June 8, 2017): The Bank of Canada is warning that Canadians and the country’s financial systems are more vulnerable to changing economic circumstances. As Shirlee Engel explains, it’s because Canadian families are going deeper into debt while the housing market is still hot.

Canadian consumer debt climbs higher
Canadian consumer debt climbs higher

Carson said that is a start. She advised people really watch their credit card use.

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“We see people who are trying to make ends meet using credit and that is a cause for concern,” Carson said.

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“The biggest mistake people make is allowing their debt problems to snowball.”

Carson said it’s important anyone using any kind of credit to pay for basic living expenses, sit down with a licensed professional to help review finances, create a budget and put a plan in place.

“Besides paying off creditors, changing your mindset and behaviours is key to breaking the debt cycle,” she said.

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MNP has also been seeing an increase in business owners facing debt problems.

“‘The business didn’t survive and now I’ve got my personal guarantees to the lender or suppliers or landlords, whoever it might be.’”

READ MORE: Planet Organic shelves empty as Alberta vendors claim they are owed money

Carson said the biggest thing that often causes debt stress is not knowing what to do: “the fear of the unknown.”

She added once you get a plan in place, that fear can often dissipate. But the key is to find the right option.

“Whatever option we pick, we want it to fix the whole situation.

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“Getting advice earlier than later can mean more options,” she added. “So that five years down the road you can see a little bit of light.”

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The MNP Consumer Debt Index was compiled by Ipsos on behalf of MNP LTD between Dec. 4 and Dec. 9, 2019. For this survey, a sample of 2,000 Canadians aged 18 years and older were interviewed.

WATCH BELOW (May 30, 2017): Blair Mantin of Sands & Associates explains the emotional impact of consumer debt and what can be done to get out of financial crisis.

The emotional impact of consumer debt
The emotional impact of consumer debt