Posthaste: Canadians in financial emergency amid perfect storm of inflation, interest rates
More working Canadians are in the middle of a financial stress emergency as they struggle to keep their heads above water amid high inflation and interest rates.
The number of people under financial stress has grown 20 per cent over the last year, making up 37 per cent of those with jobs, according to research from the National Payroll Institute and conducted by Canada’s Financial Wellness Lab.
Elevated inflation, high interest rates and an overall rising cost of living are creating a “perfect storm” where people are spending more, saving less and going into debt. Research shows spending, savings and debt levels all determine whether a person is comfortable, coping, or struggling under financial pressures, the Institute said. And right now, economic conditions mean the news isn’t good for many.
“The frightening reality of this storm is that the contributing factors to financial stress are becoming more challenging than ever for Canadians to overcome,” Peter Tzanetakis, president of the National Payroll Institute, said in a release. “They need to take immediate and urgent action.”
People who say they’re financially stressed are finding it almost impossible to save money as costs go up. To make ends meet, 63 per cent say they need to spend their entire paycheques, while 30 per cent must spend more than what they make. That means many are taking on debt or using up any savings they already have to pay for everyday expenses.
As a result, 66 per cent of those under financial pressure say they’re living paycheque to paycheque. In comparison, only two per cent of those financially comfortable, and nine per cent who say they’re coping, find themselves in the same boat.
All that stress is starting to impact people’s lives. More
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