Canadians Borrowing Cheap in Recession

Mark Carney, Bank of Canada governor issued a warning to Canadians on borrowing low interest rate loans. Our household debt-to-income ratio’s are extremely high which makes Canadians vulnerable.

Meanwhile Stats Canada revealed the ratio of debt to disposable income rose to 148.1 per cent. Canadians now owe $1.48 for every dollar of disposable income.

Low interest rates today does not mean low rates tomorrow. Canadian need to keep in mind that interest rates are likely to go up in the future and they should plan for it accordingly.

 

Canadians Act on their 2011 Resolutions Early

TD Canada Trust has just released the results of their Holiday Survey.

Here is a glimpse of the resolutions Canadians are doing today.

  • Spend less and avoid buying things I don’t need (53%)
  • Look for better deals (38%)
  • Build up savings to cover at least two months of living expenses (30%)

Debt Management Tips

The best debt management tip is to not have debt at all, but to be realistic, that is never the case. Whether it’s your mortgage, credit card bills, and monthly expenses, it is hard to avoid debt. So what is important? Here are a few debt management tips to consider.

1.     See where your money is going and how much is coming in.

2.     Be aware of monthly expenses. Keeping track of credit card purchases, utility bills, your mortgage and so on.

3.     Pay off major credit card debit first like bills with appliances, home improvement renovations, and furniture. Before you sign up for another credit card, it is important to see what your options are before you borrow and read the fine print.

4.     Be sure to have a plan. Plan out how much money will go to each expense and payment.

Debt may be hard to avoid, but it can be easy to manage.

Money Tools

Which is the best credit card for me? How do I find the best mortgage rates? What is the best way to protect myself from credit fraud? Canadians can now find answers to these questions on a website created by the Financial Consumer Agency of Canada. It features great tools such as mortgage calculators, tip sheets and resource links. It’s a great resource for Canadians to learn about financial products and services offered in the marketplace.

Our very own, Brian Denysuik, President & CEO of Creditaid, visited The Financial Consumer Agency of Canada last week in Ottawa and met with Jane Rooney, Director, and Roger Dowdall, Team Leader, Consumer Education, Financial Literacy and Consumer Education. They have developed some excellent material to help inform us of so many different things when it comes to finances. If you want to see some of these tools click here.

The Wealthy Barber at Credit Education Week

The keynote speaker at the Credit Education Week Professional Day was Mr. David Chilton, Author, The Wealthy Barber.

Mr. Chilton took the stage and talked about one of the biggest challenge consumers face today –  everyone is cheering for you to keep on spending!  He provided numerous insights for us to consider and take action.

We want to share these with you:

  • Always pay yourself first, this is the most important thing you can do.
  • Keep in mind that banks never say, oh we are lending too much and should cut back.  Banks make money lending so why would they stop!
  • Consumers need to restrain themselves from borrowing.
  • A personal line of credit is like getting hooked on drugs.  Canadians treat a line of credit like a second income and forget that they need to pay it back.
  • There are simply too many people carrying too much debt.
  • People have maxed out their borrowing at current interest rates, when rates rise there is going to be lot of problems.
  • When taking on debt for appreciating assets make sure it can and will be retired before you are.
  • When borrowing make sure that your calculations are on after tax dollars, and that the payments will not impact your savings plan and the ability to have fun!

Credit Education Week Canada

Creditaid’s President & CEO, Brian Denysuik is in Toronto this week attending the Credit Education Week Canada conference to learn about the latest in Credit industry news and trends.

Here’s some highlights of the conference.

  • An overview of the Financial Literacy Task Force Report.
  • An address from the Ontario Assistant Deputy Minister, Education Mr. Grant Clarke.
  • A fantastic speech from Mr. David Chilton, Author, The Wealthy Barber.
  • A panel presentation by Laurie Campbell, Edward Gordon and Pat Foran on the Financial Literacy Task Force Report.

And some takeways from the conference presenters:

  • Mr. Doug Melville, Ombudsman and CEO of OBSI spoke about Consumer Credit Pitfalls.
  • Ms. Lyse Laramée, from the Financial Consumer Agency of Canada spoke about helping consumers make informed decisions.
  • Ms.Terri Gibbson, Manager of Business Development for the Ontario Region at Canada Mortgage and Housing Corporation (CMHC) who spoke about making informed homeownership decisions.
  • Mr. Marc LeBrun, Director General responsible for the Canada Student Loans Program spoke about support for new Canadians seeking post-secondary education.
  • Ms. Janet Hunter who develops education materials for adult learners spoke about newcomers and financial literacy, one size doesn’t fit all.