A third of Canadian households relied on credit to cover basic expenses this year
Posted November 26, 2015 8:10 am.
Last Updated November 26, 2015 8:30 am.
This article is more than 5 years old.
VANCOUVER (NEWS 1130) – All those holiday deals are tempting, but can you afford them?
Well over a third of Canadian households didn’t have enough money in their bank accounts to cover basic expenses at least once this year, according to a new study.
Manulife Bank says one of the biggest reasons is the high price of housing putting pressure on our finances.
“Canadians may feel comfortable with their financial situation but there is a disconnect between what people are saying and what the evidence is showing, ” says Jason Daly, vice president of product and marketing.
“Over a third have indicated they were ‘caught short’ over the past 12 months as a result of some sort of unexpected household expense — that could be your furnace breaking down or a car repair — so it’s important to have a plan in place and to think about your whole financial picture,” he tells NEWS 1130.
“Especially in terms of the amount of your mortgage payments, and whether or not that is putting a strain on your financial health.”
While some of those caught short were able to access a line of credit (33 per cent) or rainy-day savings (23%), the survey found others had to carry a balance on a high-interest credit card (32%) or even borrow money from a family member (14%).
Despite those number, financial reality isn’t sinking in for many people.
Almost 80 per cent of those surveyed believed they were prepared to deal with an unexpected major expenses, but half indicated they either have “$1,000 or less” or don’t know how much they have for emergencies.
