Albertans’ confidence in personal finances plummets amid pandemic fatigue and uncertainty

Half say they are concerned about their current level of debt, the highest level amongst the other provinces (50 per cent, +9pts).
Fewer than three in 10 are confident in their ability to cope with unexpected events without increasing their debt burden (27 per cent, -5pts).
Four in 10 have concerns about coping with a loss of employment or change in wage or seasonal work, the largest increase among provinces (40 per cent, +14pts).
Three in 10, the most among other provinces, say it has become much less affordable to set aside money for savings (28 per cent, +6).

Just under 60 per cent of Albertans are confident they can comfortably cover their living expenses in the next year without going into debt, with 40 per cent saying they are finding it even harder to pay down debt.

As pandemic uncertainty continues and with many Albertans feeling financial anxiety, far more are uneasy when it comes to being prepared financially for unexpected expenses, the report states.

“Many Albertans are starting the new year under the uncertainty of another round of reduced working hours or job loss, unexpected business closures and COVID-related health concerns, and it can be hard to see the light at the end of the tunnel. Budgets are being stretched thin, and even just one unexpected expense can put a household into financial turmoil,” says Carson.

In comparison to other provinces, Albertans are the most likely, at 35 per cent, to say they are not confident in their ability to cover an unexpected car repair, jumping a significant 10 points since September.

They are also the most likely, at 41 per cent to say they are not confident they can cope financially with having an illness that renders them unable to work for three months. Albertans are also less confident in their ability to handle a change in their relationship status or cope with the death of an immediate family member, at 27 per cent and 13 per cent respectively.

Four in ten Albertans report they are $200 away or less from not being able to meet all of their financial obligations. Despite dropping six points from last quarter, this sits just below the national average. This proportion also includes nearly three in ten who say they already don’t make enough to cover their bills and debt payments, remaining above the national average.

“The cost of living is on the rise, and we expect that those households who were already overextended during the course of the pandemic may feel they have to resort to credit just to afford basic necessities and make ends meet,” says Carson.

The report states, compared to the same time last year, more Albertans are engaging in what many debt professionals consider ‘bad financial habits’. Albertans are the most likely at 27 per cent to admit to paying only the minimum balance on their credit card, compared to the other provinces. Also, more Albertans, or 16 per cent, say they have borrowed money they can’t afford to pay back quickly and 10 per cent say they were lured in by deals or offers on special days such as Black Friday this year. Additionally, six in ten Albertans point to low interest rates as the catalyst for buying things that they otherwise might not be able to afford, a staggering seven-point increase since last quarter.

With concerns over inflation and cost of living, two in ten believe their debt situation is worse than a year ago. Half of Albertans say they regret the amount of debt they’ve taken on. When looking five years into the future, more Albertans appear to be apprehensive about the road ahead, with 13 per cent believing their debt situation will worsen, an increase of six points.

“Albertans have eagerly taken advantage of low interest rates, making purchases that might not normally be within their budget. With interest rate increases potentially around the corner, and the pressure of hefty holiday bills coming due, it isn’t hard to see why many are dangerously close to the tipping point,” explains Carson.

Licensed Insolvency Trustees are federally regulated debt professionals who can offer guidance regarding all of the debt-relief options available to Albertans. They are supposed to provide customized and objective advice to help individuals make informed choices to deal with debt responsibly.

“Albertans can avoid the stress and anxiety caused by spiralling debt, creditor or collection calls, wage garnishments, and tax issues by speaking with a professional. The time to reach out for help is when you are first starting to see red flags, even an anticipated missed payment. This is the best first step to finding your financial footing once again,” says Carson.

MNP LTD, a division of the national accounting firm MNP LLP, is the largest insolvency practice in Canada.

The MNP Consumer Debt Index is an industry-leading barometer of financial pressure or relief among Canadians. For its 19^th survey conducted between Dec. 1-7, 2021, a sample of 2,000 Canadians aged 18 years and over was interviewed. The precision of Ipsos online polls for this survey is accurate within 2.5 percentage points, 19 times out of 20.

by rdnewsNOW Staff

Albertans’ confidence in personal finances plummets amid pandemic fatigue and uncertainty

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