Laurie Campbell and Kelley Keehn: B.C. residents worried about finances heading into 2019
A sense of hopelessness can cause people to do nothing and possibly make their condition worse.
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A report by The Organisation for Economic Co-operation and Development suggests global economic growth is slowing, and Canada is no exception to the rule. The report indicates “the Canadian economy was resilient in 2018 but troubling signs lay ahead” as it’s showing signs of a sharp decline in growth in 2019.
While the OECD analysts (and similar studies) look at indicators like order backlogs, business inventories and business confidence surveys, it seemed instructive to add consumer context to multiple reports on slowing economic growth by asking Canadians about a series of consumer issues. The premise is that economic issues eventually distill down to kitchen-table issues that confront people daily, such as bill payments and debt, the cost of living, job security and bankruptcy.
A new study, the Kitchen Table Forecast, found that two-thirds of B.C. residents are entering 2019 worried about their financial fortunes. The Leger poll of 1,515 Canadians (including 206 B.C. residents) was conducted for non-profit organizations Financial Planning Standards Council and Credit Canada.
British Columbians are feeling stressed about their finances and are often at a loss to improve their situation. This hopelessness can cause people to do nothing and possibly make their condition worse. Uncertainty about an ever-changing job market and economy only intensifies the average person’s confidence and ability to handle the ebb and flow that life inevitably presents.
The report didn’t ask about the dreaded R-word — recession. But 42 per cent of British Columbians feel that the economy will get worse in 2019 while 34 per cent believe it will stay the same. Only 10 per cent feel it will improve. Across the country, people aged 55-plus are significantly more likely than those under 55 to feel the economy will get worse in 2019 — 47 per cent versus 39 per cent.
It’s no surprise people over 55 are more pessimistic (or realistic) when it comes to the Canadian economy. This isn’t their first rodeo and they know the red flags. Insolvency rates were up by more than five per cent last fall, the country has seen five interest-rate hikes since mid-2017 and the cost of living continues to rise. If debt levels don’t drop, it’s only a matter of time before generational trouble may ensue.
The issues that are keeping people up at night include the increased cost of living, keeping up with monthly payments and debt and mortgage-rate increases. More than one in five are concerned with either losing their job or other bread winners in the home losing their job.
In the end, while the report paints a depiction that is a little frosty, it’s not all pessimism. On the positive side, one in four B.C. residents are “not worried about anything” going into 2019.
There are plenty of steps that can be taken to ensure financial security, no matter where a person sits on the spectrum of debt or savings. Here are some basic ways to escape the cycle of financial letdowns:
• Build and stick to a monthly budget that cuts costs in easy areas such as cellphone and internet plans and gym memberships.
• Contribute regularly to an emergency savings fund.
• Pay down debt. Start with paying off the credit cards with the highest interest rates.
• Consider your insurance needs during times of high debt in the case of death, disability or job loss.
First and foremost, don’t panic. Canadians frequently seek out expert assistance from a number of sources. For example, a certified financial planner can create a plan that protects a family’s downside. People in debt often find relief through a not-for-profit credit counselling agency that are confidential, non-judgmental and offer free expertise on things such as personal debt consolidation.
It’s never too late to get started. Through education, sound management and by using the financial tools that are readily available, Canadians can weather the 2019 economic storm.
Laurie Campbell is CEO of Credit Canada. Kelley Keehn is an author, educator and consumer advocate for the Financial Planning Standards Council.
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