A new survey finds paying down debt is once again the top financial priority for Canadians in 2017, the seventh straight year that debt concerns have headlined the annual survey. Coming in at nearly 30%, prioritizing debt repayment is at its highest level since 2010.
Canada’s CIBC, the poll sponsor notes too few consumers are actually seeking advice on how to build a repayment plan.
Key Poll Highlights:
• 28% of Canadians say paying down debt is their top financial priority for 2017.
◦ Of those prioritizing debt repayment, the vast majority (76%) are most concerned with paying their credit card and line of credit debts.
• Encouragingly, 70% of Canadians say they did not take on any new debt in the past 12 months, while 28% did.
◦ Among those incurring new debt, almost a third (32%) cited managing day-to-day expenses beyond their monthly income as the primary reason for debt accumulation.
According to the latest data from Statistics Canada, household debt, including mortgages, rose to a record 166.9% of after-tax income in the third quarter, with debt loads rising faster than disposable income.
The findings also revealed that just over half of Canadians surveyed (52%) plan to reduce their spending on non-essential items to meet their 2017 financial goals. Yet, only a quarter (26%) will actually set a household budget, and fewer still (12%) will meet with a financial advisor to get professional advice on how to reduce their debt and meet their financial goals.
• Talk to an Advisor – put realistic steps in place to reduce interest costs and accelerate debt repayment. Pay off your most expensive debts first and/or consolidate your consumer debts into one loan with one payment at a lower interest rate.
• Create a spending plan and recognize that your finances are all connected – progress on one financial goal can open up opportunities to improve others.
• Focus on longer term – controlling spending and eliminating high-interest debt is vital and will help you build your retirement savings. Even small contributions today can make it easier to grow your wealth or investments.
• Stick to the plan – If you fall off track, get back to your plan as soon as possible and keep making progress towards your goal.