Why Are Ontarians More Likely to Need Debt Relief?Oct 21, 2018
When it comes to affordability and the need for debt relief, how do Ontarians compare to the rest of Canada?
Our inaugural Affordability Index shows that those living in Ontario are more likely to feel their debt is overwhelming when compared to the national average — 27 per cent compared to 24. Respondents said that cost of living in Ontario is difficult to afford — including food, housing, transportation, and saving for a major purchase — when compared to those in Quebec for example.
Why is Ontario so difficult to afford?
When you think about Ontario, one might expect that higher income in metropolitan areas may lead to comfortable living; however, significant higher cost of living is a factor in making life quite unaffordable.
In reality, a recent Angus Reid report suggests that income may have less to do with overwhelming personal debt than might be expected. The July 2018 study found that one in five people defined as “struggling with debt” had household incomes between $50,000 and $100,000. This suggests that cost of living in a certain area or the cost of childcare are significant factors to consider in levels of affordability.
Of course, these factors are especially present for those living in the Greater Toronto Area. Mississauga has some of the highest childcare costs in Canada, with an average of $1,222 a month, according to a 2017 study by the Canadian Centre for Policy Alternatives. The median price of childcare for an infant in Mississauga is more than ten times what you would pay for a similar service in Montreal.
It’s not just childcare, though — financial roadblocks in the GTA also include the cost of food, gas, and housing.
Considering these costs, what can Ontarians do to make life more affordable and reduce debt?
For those feeling overwhelmed by personal debt in Ontario, dealing with existing debt early and finding ways to cut everyday costs are two tried and true methods for distressing your finances.
Getting resources from a Licensed Insolvency Trustee (LIT) is a first step for dealing with existing debt. The process of working with an LIT can help you identify solutions for your unique situation, starting with a free initial consultation. From there, the LIT can refer to a do-it-yourself budgeting solution, a professional in credit counselling or lending, or by reviewing more formal options, such as a bankruptcy or a consumer proposal.
The key here is to get educated early on — the Affordability Index found that a quarter of respondents did not know what to do about their overwhelming personal debt. By getting solutions from an LIT early, you can avoid this helpless feeling.
You can also find ways to cut everyday costs. There’s no question that living costs in the GTA can add up quickly. To help combat this, create a household budget and promise yourself that you’ll stick to it. Make small changes in your daily life — biking to work to save money on gas, shopping for deals and discounts where possible. Make these changes and constantly re-evaluate your budget. Feeling like your spending is within your control can also help your debt relief and offset any helpless feelings you might have.