More and more British Columbians are being careful how they spend their money and making harsh cutbacks amid economic uncertainty and high living costs.
According to the latest MNP Consumer Debt Index, conducted quarterly by Ipsos, 17% of BC respondents are delaying or skipping medical, dental or prescription care and 27% are eating less to make ends meet.
“People are really stretched on their budget and they need to look at where they're gonna cut,” said Jeane Herman, a licensed insolvency trustee based in Kelowna.
Herman recently spoke to NowMedia and noted that her practice has been getting “busier and busier.”
“It's a vast majority of people from all walks of life that have maxed out their credit cards and realized they're never getting rid of the debt and the credit card payments combined with their household bills, it's just more than they can bear. They just can't afford it," Herman explained.
The MNP Consumer Debt Index also stated that 40% of respondents have stopped ordering takeout or dining out and 30% are cutting back on their utility consumption to save money.
Alongside those cost-cutting measures, 44% of British Columbians are within $200 of being unable to pay their bills.
“When there’s so little left at the end of the month, even a small, unexpected cost can force people to rely on credit that comes with steep borrowing costs,” said Linda Paul, a licensed insolvency trustee with MNP LTD.
“At that point, debt can quickly snowball and become overwhelming. The longer people wait to get help, the more difficult it can feel to find a way forward.”
Herman echoed Paul's message.
"Let's take it...somebody's maxed out their credit card, they're not able to put those groceries on their credit card anymore, and now they have to pay for the groceries out of their pocket, and they have the minimum payment on the credit card," Herman stated.
"Can they do it? What happens when they can't?"
Herman recommends that if someone is having financial problems, they should speak to a professional to get a clear picture of their next steps to take.
“If I were to give people advice, doing the job I do…it's tracking where your money's going,” said Herman.
“Because a lot of people aren't aware of where their money goes. They can't make changes until they know.”
The Kelowna-based insolvency trustee added that while the latest MNP Consumer Debt Index covered individuals, it is not just individuals who are struggling.
“It's not just individuals,” she said.
“Our survey is about individuals, it's a whole picture of if individuals are doing bad, then businesses are gonna start doing bad, and they are.”
Watch the above video to hear more about what the pair discussed, including mortgage renewals, the future of AI in the workplace and much more.
