Living Paycheque to Paycheque
CBJ — It seems to be somewhat of a conflict of reality when some financial experts opine that the Canadian economy is robust and moving in the right direction when at the same time a survey by the Canadian Payroll Association suggests nearly half of all workers are living living paycheque to paycheque due to soaring spending and debt levels.
The CPA poll of nearly 5,000 participants found 47% of respondents said it would be difficult to meet their financial obligations if their paycheque were delayed by even one week. About 35% say they currently feel overwhelmed by their debt. That fear won’t get any relief now that the banks have all raised their lending rates from 2.95% to 3.2% following the Bank of Canada increasing its overnight trendsetting rate to an even 1%.
While it’s true spending is up, which looks great on the surface, the underlying concern is that many who are doing the spending really can’t afford it, i.e. purchases are being made on credit, which just adds to the overall debt levels. Eventually the house of cards falls, and therein lies the dilemma.
Of the major reasons for increased spending, 32% of respondents blame higher living expenses while 25% say it has to do with unexpected expenditures.