A balanced budget is to financial health what a balanced diet is to physical health. Where does the money go? Do you feel like you have a hole in your pocket? Is your spending out of control? Statistics Canada reports that Canadian household debt hit a record high during the third quarter of 2014, as it grew at a faster pace than disposable income. The total amount of credit market debt, which includes mortgages, non-mortgage loans and consumer credit, held by Canadian households increased to 162.6% of disposable income during the quarter. That means Canadians owed about $1.63 for every dollar of disposable income in the third quarter. No wonder we’re scrambling. According to Equifax Canada:
- Debt levels are climbing fast to a record $1.422-trillion in the fourth quarter of 2014.
- Installment loans, largely made up of car loans, were the fastest growing segment of debt, up 11% year over year.
- Credit card debt rose 5.9% from a year ago.
Many of us don’t realize the importance of a balanced budget and as a result we live beyond our means and get into financial hot water. A balanced budget is to financial health what a balanced diet is to physical health. Everyone should have a budget. It’s an important money management tool that will show you exactly how much money you receive, how much you spend, what you spend it on and how much you save. It will help you to establish spending limits, reduce spending and allow you to live within your means.
If you’re suffocating under a mountain of debt, contact Ira Smith Trustee & Receiver Inc., your Vaughan bankruptcy trustee, today. One of the most important things when we are consulting with a consumer debtor is for them to have a balanced budget. We will work with you so that Starting Over, Starting Now you can live a financially healthy life. Watch for our next blog – A Balanced Budget is to Financial Health What a Balanced Diet is to Physical Health – Part 2 – when we’ll be discussing a case from our files and how important a balanced budget is when working with a trustee.
I and my colleagues wish you a healthy, happy and balanced New Year.