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More Canadians are Debt-Free This Year!

Well, the government sent out the panic alarm warning us about our sky-high debt levels, and a recent poll by RBC shows that we may just have been listening!

For the past two years, the Bank of Canada, along with Finance Minister, Jim Flaherty have been doing all but screaming at us about our debt levels and the amount we continue to wrack up month after month, year after year. But, according to the annual RBC poll, this past year we’ve been sitting up and taking notice of the warnings,and more Canadians became debt-free in 2012!

Surveying over 2,000 Canadians this past summer, the RBC poll found that 26 per cent of Canadians were debt-free (not including mortgage debt) in 2012. At just over a quarter of us, that’s an encouraging number; especially when you consider that the number is up from 22 per cent last year.

Not only are more of us becoming debt-free, but those of us that are still looking to achieve that milestone aren’t as happy with where we sit as we were last year. In 2011 almost half, 45 per cent, of Canadians were comfortable with their debt; while only 40 per cent of us are in 2012. This could mean that next year’s results show even better numbers, as more of us seem to be getting serious about our debt.

Perhaps nearly half us are still comfortable with our debt levels because the majority of us believe we’re in better financial shape than our neighbours – a whopping 75 per cent the poll shows!

And while we should certainly feel good about these results, the amount of non-mortgage debt we’re carrying, on average, is higher than it was last year. The chart below shows that it’s $84 per person more. You can also see on this graph that residents in Ontario carry the highest amount of debt at $15,361; while residents in Quebec had the lowest amount of debt per person, at $10,171.

Just over half of us, 51 per cent, also think it’s more important to use our money to pay down our debt than it is to save it or invest it. This could also be a sign that next year’s numbers could be even better, and that we’ll be able to start making those other investments we’ve been thinking about.

The survey is timely. Not only have federal officials been warning us about our debt levels, but The International Monetary Fund also released a report this past week indicating that our debt levels are too high. All of the above have also called our household debt the biggest threat to our national economy.

Want to know more about debt, where we stand, and how to work on reducing yours? Come back next week when we’ll run a mini-series breaking down debt, and what you can do about it!

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