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Manulife debt survey: Introduction

The Manulife debt survey 2016 published recently shows that the results continue the trend of earlier Manulife surveys. We have written about the Manulife debt survey findings before in some of our blogs including:

• #VIDEO – DEBT INTO RETIREMENT: DO YOU NEED RETIREMENT SOLUTIONS?#
• CONSUMER DEBT CANADA & TORONTO HOUSING BOOM PUTS CANADA’S ECONOMY AT RISK
• #VIDEO-AVERAGE CANADIAN DEBT INCLUDING MORTGAGE#
• AVERAGE HOUSEHOLD DEBT IN CANADA: CANADIANS LOVE TO MAKE IT CONTINUALLY RISE!
• DEBT: HOW ARE YOU MANAGING IT? NEED HELP WITH YOUR FINANCIAL PLAN?

Manulife debt survey: Majority of Canadians have no savings

The findings in the current debt survey shows that Canadians are continuing to rely upon debt and not building up any savings to speak of. The highlights from the 2016 Manulife debt survey are:

• almost 4 in 10 homeowners were “caught short” at least once in the past 12 months in that they didn’t have enough money in their bank account to cover expenses
• 6 in 10 homeowners lack confidence that they’ll be able to maintain their lifestyle in retirement
• a weaker Canadian dollar had an impact on over half of homeowners’ daily lives. It affected Canadians more on the spending and consumption behaviours than saving, debt repayment and investment activities
• 1 in 4 homeowners indicated they expect their home equity will make up over 80% of their household wealth at retirement
• 1 in 4 homeowners in their 50s expect their home equity will make up over 80% of their household wealth at retirement

Manulife debt survey: What does it mean for Canadians?

What this means is that on average:

• Canadians’ wealth is composed of their equity in their homes and nothing else
• spending habits are such that they have no savings to speak of
• if faced with an emergency people couldn’t put their hands on a few thousand dollars of cash quickly
• baby boomers have not saved for retirement, other than for the equity in their home;
• millennial’s see their fate as the same as the baby boomers
• on average, Canadians’ spending habits are such that many times they do not have enough money to live before the next payday
• Canadians can barely make ends meet living paycheque to paycheque

Manulife debt survey: 5 simple questions to ask yourself

The dangers are obvious. With everyone’s wealth tied up in the equity in their homes, most Canadians are cash and investment poor. Canadians worry that they won’t be able to live their current lifestyle in retirement. Also, without cash and investment savings, upon retirement, homeowners will have to sell their home to have the necessary cash to live on. Ask yourself the following:

1. Is all of my wealth tied up in the equity in my home?
2. Am I living paycheque to paycheque?
3. Do I barely have enough cash until next payday?
4. If faced with an emergency, would I have to try to borrow more money because I don’t have a few thousand dollars available?
5. Do I have too much debt?

Manulife debt survey: Do you have no cash and too much debt?

If you have answered yes to any of these questions, there is help available for you. If you’re like many Canadians who don’t have a plan to deal with debt repayment, you need professional advice. Contact Ira Smith Trustee & Receiver Inc. before your debt load becomes critical. The earlier you begin to deal with it, the more options you’ll have. We approach every file with the attitude that financial problems can be solved given immediate action and the right plan. Starting Over, Starting Now you can live a debt free life.

Manulife debt survey 2016