As rising inflation in Canada continues to put pressure on household budgets, a new survey reveals that 50% of Canadians are dealing with the increased cost of living by reducing their living expenses.
Conducted by BDO Debt Solutions, the study aimed to understand how Canadians are handling affordability issues and escalating debt.
The survey found that 56% of respondents are cutting back on non-essential items due to inflation, while 30% are so overwhelmed by their debt that they are unsure of how to deal with it.
“Inflation has made tackling debt even harder,” said Nancy Snedden, National Leader of the BDO Debt Solutions practice. “People are demonstrating the need to take a coordinated approach that combines budgeting, debt management, and diversifying their revenue streams when possible.”
The survey, which collected responses from over 1,500 Canadians, found that 37% plan to reduce their debt in the coming year by improving budgeting habits. This figure rises to 47% among respondents aged 18-34.
Moreover, it was found that lower-income households are reducing not only non-essentials (67%) but also some essentials like food, clothing, and utilities (58%).
Regarding revenue diversification, nearly 31% of Canadians indicated they would consider taking on additional work to gain more financial independence, afford essentials (26%), and reduce debt (26%). Around 24% of Canadians aged 18-34 have already taken up part-time work to deal with inflation.
A concerning finding from the survey was Canadians’ unfamiliarity with various debt management strategies. Nearly 29% are not at all familiar with debt consolidation loans, 32% with debt management plans, and a striking 51% are not at all familiar with consumer proposals—a debt reduction strategy that is more popular than bankruptcies and does not affect a person’s assets.
Snedden highlighted the importance of exploring debt relief options and encouraged seeking advice from a Licensed Insolvency Trustee. BDO Debt Solutions, with over 160 locations across Canada and over 60 Licensed Insolvency Trustees, remains committed to assisting Canadians in navigating their financial future.
The BDO Affordability Index was conducted online between April 14 to April 16, 2023, among a sample of 1,549 Canadians aged 18 and over. BDO Debt Solutions is one of Canada’s oldest and largest debt help firms, aiding Canadians in finding solutions to their debt issues since 1958.
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