Sarita Patel
Today marks the saddest day of the year, also known as “Blue Monday.”
Not only is the weather and lack of sunlight causing seasonal affective disorder, but bills are coming in from holiday spending, which in itself causes people to fall into debt depression.
MNP released its latest Consumer Debt Index, and it shows that British Columbians are increasingly pessimistic about their consumer debt.
“More British Columbians see grey skies on the horizon for themselves and their families heading into the new year and beyond as fewer expect their debt situation to improve,” says MNP.
“For some, there has been a shift from debt apathy to debt hopelessness,” says Lana Gilbertson, a licensed insolvency trustee with MNP.
“When people start to feel the hopelessness, they may give up entirely on trying to pay down their debt, or they respond by ignoring their debt completely, which is even worse,” adds Gilbertson.
Studies show that BC residents feel worse off now compared to the past. One-quarter say their debt situation is worse than it was five years ago.
“For those who come to the alarming realization that there is no clear path for them to repay what they have borrowed, regardless of the time frame or interest rate, it can be extremely stressful,” says Gilbertson.
A quarter of British Columbians say they are already unable to meet all their monthly financial obligations. The percentage rises to 46% when including those who say they’re $200 or less away from being insolvent at month-end. Half of the residents aren’t confident they will be able to cover their family and living expenses without going into further debt this year.
“Financing a lifestyle on credit – especially for those using their homes – is a recipe for trouble,” Gilbertson says.
“If you are using any form of a credit to make ends meet, it’s time to sit down with a licensed professional who can review your financial situation, help you create a budget and ensure you have a plan in place that will allow for any emergency expenses, should they arise.”
Gilbertson says “the only way to truly break the cycle of debt is to not only pay off your creditors, but also change your mindset and spending behaviours so that you don’t end up back in the same financial trouble again in the future.”
