Positive result from debt envisioned but sleepless nights a reality for
WINNIPEG, May 25, 2011 /CNW/ - According to the latest research from
Investors Group, a majority of Canadians who are in debt say they
believe it will have a positive future impact on their life.
Of the 75 per cent of Canadians who say they are in debt, more than half
(54 per cent) point to purchasing property as the main reason. Another
37 per cent have used debt to invest in home renovations. Nearly
one-in-four (28 per cent) have gone into debt to make a financial
investment and 18 per cent have taken on debt to invest in themselves
for skills upgrading or going back to school.
But there's also a far less positive side to the Canadian personal debt
While being in debt may be the new 'norm', 58 per cent of Canadians with
debt feel uncomfortable even though they acknowledge they can live with
it. Thirty-per cent are outright embarrassed by it. One-in-three
Canadians with debt (33 per cent) admit to losing sleep over their debt
load and 25 per cent say debt talk has triggered disagreements with
"The reality is that almost everyone has consumer debt," says Jack
Courtney, Assistant Vice President, Advanced Financial Planning of
Investors Group. "But accumulating debt with purpose and putting
thought into how debt will be repaid is very different than spending
beyond one's means and without foresight."
Canadians trying to cope with debt
The majority of Canadians with debt (73 per cent) say they have some
idea about how they will pay what they owe. When asked for details,
thirty-five per cent said they simply plan to curb their spending. One
in four Canadians with debt (27 per cent) are considering more drastic
steps. Fourteen per cent are considering delaying retirement and
working to pay down their debt while 13 per cent plan to make more
money by working at more than one job.
Paying off consumer debt such as credit cards is the greatest priority
for 57 per cent of Canadians with debt. Paying off their mortgage is
the primary objective for 25 per cent while 18 per cent are focused on
paying off personal loans.
When it comes to making a major purchase, most Canadians say they either
pay entirely in cash (33 per cent) or as much as they can in cash (41
per cent). Another 13 per cent check their monthly budget to ensure
they can cover the minimum payment required but a similar number (13
per cent) say they just make the purchase without worrying about how
they will pay for it.
"While debt financing can be helpful in purchasing a home or funding
education, debt can also have very negative impacts on Canadians'
ability to save and invest," Courtney says. "A financial advisor can
help develop a long term financial plan that includes managing,
reducing and ultimately eliminating personal debt."
The pulse of Canadians' debt
58 per cent of all Canadians feel they are in great financial shape and
only one-third (31 per cent) would go back and do things differently if
54 per cent of Canadians with debt say their personal and household
total debt has decreased in the past year; twenty per cent say there's
been no change.
66 per cent of Canadians say day-to-day living expenses are contributing to their debt load. Three-in-ten cite travel and vacation costs while nearly a quarter (23
per cent) point to entertainment and recreation.
31 per cent say their debt makes them feel as though they have achieved
acceptable financial status because they are considered credit worthy.
40 per cent of Canadians think they have less debt than their friends
while only 19 per cent think they have more.
15 per cent of those in debt say it is the result of bad budgeting and
overspending and eight per cent say they believe they will never climb
out of debt.
Aurele Courcelles, Director, Tax and Estate Planning, gives Canadians
some advice and helpful tips on how to manage debt on Youtube.
About the Survey Methodology
These data were collected through an online panel survey between April
27 and May 8, 2011. In total, 1,020 surveys were completed
nationally. Online panel surveys are non-probability samples and thus
margin of error cannot be calculated. However, stratified sampling and
weighting was done to bring the sample in line with Census profile.
About Investors Group
Investors Group, founded in 1926, is a national leader in delivering
personalized financial solutions to Canadians through a network of
approximately 4,600 Consultants located throughout Canada. In addition
to an exclusive family of mutual funds and other investment vehicles,
Investors Group offers a wide range of insurance, securities, mortgage
and other financial services. Investors Group is a member of the IGM
Financial Inc. (TSX: IGM) group of companies. IGM Financial is one of
Canada's premier financial services companies with over $134 billion as
of April 30, 2011 in total assets under management.
SOURCE Investors Group Inc.
For further information:
Teresa Pagnutti or Lisa Mills
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