Saskatchewan residents on average are spending forty-per-cent more than they are making. In recent data released by Statistics Canada, the household debt-to-income ratio was 144 per cent in Regina ad 139 per cent in Saskatoon, which means a household with a $100,000 income has over $140,000 in debt.

The trend by StatCan shows that while the United States has seen a decline in debt-to-income ratios since 2007, Canada’s has continued to rise to an average of 175 per cent nation-wide with some larger cities including Toronto and Vancouver, at over 200 per cent.

StatCan reported that 18.6 per cent of those in the lowest income bracket had less than $500 in net worth in 2016, and with the accessibility of credit cards and some quick approval loans, some may not even give a second thought to living beyond their means.

Ryan Tebbutt, general manager at the Kerrobert Credit Union, said that in this day-and-age, it is difficult not to use credit cards and lines of credit to make either purchases online or larger items, however, he said some of these purchases can often be on impulse without the buyer knowing if they really can afford it in the long run.

“People can buy a boat where some places will finance it over 25 years, which could look attractive in the moment, but not only are you paying more in the way of interest, if you want to sell that boat in 5 or 10 years, you may not even be able to break even, then you are paying for something you don’t even own,” said Tebbutt.

Tebbutt suggests to keep luxury items, or non-essential items, such as boats and recreational type purchases to a maximum five year financing plan. Additionally, he suggests to always think purchases through in advance and decide if the payment is actually affordable.

He said a rule of thumb that he uses is, to be able to make a payment that is three-percent of the total purchase price or loan, which would allow you to have it paid off in three years as a best case scenario. He added that if you do have multiple loans and payments and are at the point of being overwhelmed, he suggests to start with the smallest amount owing and pay that off first.

This in turn can give you a small win, allow you to cross one off the list and then also, put more money onto other debts afterwards.

If in doubt, he suggests always starting with a budget, write down every single expense offset by your net income, get a clear picture about where you are at and how to move forward in a way that makes sense for your household.


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