Need to break the stigma of asking for help, says debt expert
CALGARY, Alberta, Oct. 30, 2018 (GLOBE NEWSWIRE) -- Most (85%) Canadians agree that financial literacy in Canada is lacking, and this lack of knowledge is contributing to Canada’s consumer debt problem (87%). Most point to the school system to lead the charge, as 94 per cent of Canadians agree that Canada’s schools need to do a better job at teaching financial literacy skills to children. In fact, 85 per cent of respondents wish they personally had the opportunity to learn more about finance and the economy while in school.
“Developing good money-management behaviours like budgeting early on in life is critical to financial well-being in the long term. Without basic financial literacy skills, individuals are more easily lured into debt: using credit cards, extending lines of credit and taking out high interest predatory loans, without fully understanding the costs of paying back those debts," says Grant Bazian, President at MNP LTD, who leads a national team of Licensed Insolvency Trustees in over 230 offices across the country.
When put in the spotlight, only 16 per cent of Canadians strongly agree that they personally have strong financial literacy skills. Conversely, four in ten (39%) admit that they have poor financial literacy skills. While Canadians lack confidence in their own financial literacy skills, they are even more skeptical of their fellow neighbour – only one in three (35%) agree that Canadians have strong financial literacy skills.
As financial strain due to rising interest rates hangs over the heads of many Canadians, it is perhaps unsurprising that their confidence to cope financially with an unexpected life changing event is low. Only a minority are confident that they wouldn’t incur more debt if faced with a change in their relationship status like a divorce (32%), unexpected auto repairs or purchase (33%), having to take three months off work due to illness (31%), a job loss or wage decrease (29%), a death in the family (30%), or paying for someone’s education (27%).
Those who admit to not having strong financial literacy skills are more likely to face hard financial times. Not only are they likelier to be concerned about their financial future and their ability to pay their debts, but they are also far less confident in their ability to cope financially with unexpected life changing events.
| %Disagree Financially Able to Cope with Unexpected Life Changing Events | % Strong Financial Literacy | % Poor Financial Literacy | ||
| Loss of employment / change in wage or seasonal work | 24% | 45% | ||
| Unexpected auto repairs or purchase | 17% | 35% | ||
| The death of an immediate family member | 22% | 42% | ||
| Having an illness and being unable to work for three months | 21% | 42% | ||
| A change in your relationship status (i.e. divorce, separation) | 19% | 34% | ||
| Paying for your own or someone else's education | 26% | 50% | ||
“It is usually a sudden unexpected life event that causes individuals to become insolvent; a job loss, divorce, the loss of a loved one. Those who are severely in debt and lack financial knowhow are far more vulnerable,” says Bazian, who recommends having at least three to six months of expenses saved in case of the unexpected.
Bazian says the survey results and Canadians’ current debt levels point to a clear need for more financial literacy education but also for more open conversations about debt and financial health.
“In order for the situation to improve we need to break the stigma of asking for help. So many people are living with financial shame and they are too embarrassed to even talk about their debt. Silence only compounds the problem. Anyone overwhelmed by debt should seek help right away,” he says adding that it is important to seek advice from a reputable source.
Licensed Insolvency Trustees are the only government regulated debt professionals who offer a full range of debt relief options and can guarantee legal protection from creditors through consumer proposals and bankruptcies.
About MNP Debt
MNP LTD, a division of MNP LLP, is the largest insolvency practice in Canada. For more than 50 years, our experienced team of Licensed Insolvency Trustees and advisors have been working with individuals to help them recover from times of financial distress and regain control of their finances. With more than 230 Canadian offices from coast-to-coast, MNP helps thousands of Canadians each year who are struggling with an overwhelming amount of debt. Visit www.MNPdebt.ca to contact a Licensed Insolvency Trustee or get a free checkup for your debt health using the MNP Debt Scale.
About the Survey
The survey was compiled by Ipsos on behalf of MNP LTD between September 10 and September 17, 2018. For this survey, a sample of 2,003 Canadians from the Ipsos I-Say panel was interviewed online. The precision of online polls is measured using a credibility interval. In this case, the results are accurate to within +/- 2.5 percentage points, 19 times out of 20, of what the results would have been had all Canadian adults been polled. Credibility intervals are wider among subsets of the population.
CONTACT
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