Financial advisors hope Canadians heed debt warning
Posted Dec 14, 2010 11:24 am.
This article is more than 5 years old.
Money Managers say they are not surprised by the recent warning from the Governor of the Bank of Canada.
Mark Carney sounded an alarm after word that the ratio between household debt and income in Canada surpassed 148 per cent in the third quarter.
Carney is worried many people will have trouble paying their bills when interest rates start to climb, which they will.
Tracy Watson with Money Mentors tells 660News inquiries for financial advice this year are up 20 percent compared to the same period a year ago.
Watson says people need to remember that it’s much harder to pay off debt than it is to rack it up.
She says a person with $15 thousand dollars debt on a credit card , who only makes minimum payments will need almost 19 years to make that bill disappear.
The Editor of the Canadian MoneySaver, Dale Ennis recommends those already over extended look at a consolidation loan.
Both Ennis and Watson says finances are something the entire family should talk about.
Watson says a good rule of thumb to follow when it comes to household / debt servicing levels is not to exceed 35 per cent of disoposable income and that includes the mortgage or rent as well.
