Between the crazy costs of living, huge debt loads, and lack of income growth – nearly everyone is feeling financially tapped. Now the BDO Canada Affordability Index confirms what already know to be true: most of us — in fact over half (53%) of Canadians — live paycheque-to-paycheque.
The index also revealed that over 25 per cent of people find their debt overwhelming and that just over a quarter (27%) still don’t have enough money to meet their daily needs.
Not surprisingly, people are relying on their credit cards more than they should – even as the cost of borrowing rises.
Over half of Canadians are carrying substantial credit card debt and 31 per cent say the size is increasing. Meanwhile, almost a third of those surveyed admit they delayed paying their credit card bill because they simply couldn’t afford it.
Doug Jones, President of BDO Canada Limited, said that the challenges were more heightened than ever this fiscal year. “Affordability and debt challenges continue to weigh on Canadians, and what this year’s Affordability Index reveals is that, over time, the cumulative effects are having a significant and increasingly negative impact on financial goals.”
That includes the dream of retirement. The BDO index revealed that now 39 per cent (compared to 31 per cent the previous year) admitted to having no retirement savings. And one third of those people are actual boomers or seniors struggling to afford day-to-day life.
And Gen-Xers aren’t doing much better. The demographic (aged 35-54) is not in the financial position to ponder retirement any time soon – almost four-in-10 (38%) Gen Xers have no retirement savings (compared to 33% in 2018) and almost half (47%) say they can’t afford to save for retirement. Nineteen per cent said that they needed to pay off other debts before they could begin to save for retirement.
Is it time for more Canadians to “Marie Kondo” their financial life?