Affordability of Life in Canada
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The fourth annual BDO affordability index shows that the Covid19 pandemic continues to affect Canadians financially. The BDO Affordability Index is a survey done annually that examines how affordable life is in Canada. This year we see that Canadians continue to struggle as Covid19 continues to erode the standard of living. Those who have been affected by the pandemic through job loss and reduced incomes are finding it difficult to handle the rising cost of living. There is also a fear that some will not be able to return to the standard of living they enjoyed pre-pandemic, because of rising debt levels.
The level of household debt and the uncertainty as we continue to feel the effects of the pandemic has no doubt created stress for many individuals. Now not only is there stress with worrying about our physical health, but our mental health is greatly affected by the financial effects as well. So, what is a person to do? The feelings of helplessness when it comes to your finances can be overwhelming and so it is important to seek out professional assistance. We seek help for our physical and mental health from other professionals, so why not seek assistance with your finances when they also directly impact your physical and mental health?
If you are unsure of where you stand and if you need help, it is important to review your household spending to see if you are breaking even in your monthly budget. If you are finding you are regularly spending more than the income coming in, it is likely that excess spending is being covered by some form of credit. This can be an indication that you should speak to a professional, but you can also look to your spending and see where you can trim your expenses in order to balance your budget, as well as include a debt repayment plan. You want your total spending to be within the income that is coming into the household, without using credit to subsidize that spending. To do this, you will want to keep track of every last dollar being spent in order to determine if there is unnecessary spending that can be eliminated in your budget. Getting rid of the unnecessary spending may be enough for you to get your budget back on track and also to formulate a strategy for paying down your debt.
The most important thing is understanding your spending and your needs. We know through BDO’s Affordability Index in the last couple of years that Canadians continue to struggle with affording the basic necessities to live. This also means there is little or no savings for emergencies or retirement.
