Household debt has reached a new all-time high of 1.5 trillion dollars according to a new report by the Certified General Accountants Association of Canada.
WhereParentsTalk.com spoke with Rock Lefebrvre, VP, Research & Standards, CGA-Canada about his helpful hints regarding your families spending habits.
What are your top tips for families who are struggling with these record levels of household debt?
“It has always been expensive to raise a family and for many, it is all too easy to rack up debt along the way. The trick is to balance your spending, saving and paying down debt – but often that is difficult to achieve.
Borrowing decisions are personal choices but if you are finding it tricky to manage your debt, or if it is worrying you, the best tip is not to ignore your situation: find help. There is a lot of advice and guidance available; for example, check out the Financial Consumer Agency of Canada or talk to a credit counseling organization.
Every family’s circumstances are different and it is important to base borrowing decisions on a thorough assessment of your own situation.”
How can parents educate their kids about proper saving and budgeting habits?
“We think everyone – government, banks, schools and families – has a role to play in improving financial literacy levels in Canada.
Parents can help by educating themselves about financial planning and passing on those good habits to their children through everyday life.
A simple trip to the grocery store can help children understand how much items cost and how you can work to a budget by keeping a close eye on the cost of each product you buy.
Try encouraging children to save their allowance to buy that special treat instead of stepping in and buying it for them.”
What advice do you have for young families just starting out?
“Our research shows that many Canadians do not understand their finances very well, so a great first step would be to get informed about your family’s savings and debts so you have an accurate picture of your financial situation. That will make it easier to set a realistic budget and plan for the future.
In the key findings of the report it states: The single-parent family is the only category where debt increases with age. (Those families have two-thirds more debt than couples with
no children) Why is this?
“Our research assessed the overall level of household debt and identified some trends that have emerged over the last few years.
One fact we came across is that single-parent families are particularly financially vulnerable. Without examining every potential reason behind this outcome, it can reasonably be conceded that single-parent families are juggling all the expenditures associated with raising a family, with typically less income than a two-parent family would have.”