Consider this, only 51% of Canadians indicate they had a household budget. Household debt reached a new all time high reaching $1.41 trillion in December 2009, if spread evenly across all Canadians this would equate to each Canadian having about $41,740 in debt. Borrowing through personal lines of credit has increased 25 fold between 1989 and 2009. What does all this mean?
Consumers, despite the economy we are currently living in, are continuing to practice poor financial management. There is a disconnect between understanding the action of spending and the consequences. With access to credit in everyones' face, can you blame them? When 60% of consumer credit is issued by personal lines of credit, consumers are not getting or seeking sound advice. Traditionally a person would go in to see their personal loans officer to identfy if they qualified for a loan. The loans officer would ask a series of questions, review the debt load and income, and make the decision. It seems that once a person was granted revolving credit this excercise was removed and decisions to utilize the credit went astray.
While savings in Atlantic Canada dropped an additional 0.8% again in 2009, consumers continue to spend what they don't have and not plan for the future or rainy day. The looming statistic is the rate at which fellow Newfoundlanders are going insolvent. Total insolvencies in Newfoundland and Labrador increased by 20.5% from February 2009 to Feburary 2010. Many have no idea on how this impacts them personally until it is to late. THAT IS ANOTHER BLOG coming soon!!
So, what to do???
Now is the time to go into your credit union branch and meet with a representative to work out a plan. We are not here to just provide the loan of the day, or cash your cheque; we want to provide you wise financial guidance. We have the tools to show you how we can save you money and build some savings so that we can hopefully bring the grim statistics mentioned above, down. Call today; you will be glad you did, and share your stories with us on this blog!!
