Financial woes are a reality for the vast majority of Albertans according to a recent poll that shows nearly three in four Albertans are in debt.
The phone poll, commissioned by CIBC, found that 75 per cent of Albertans hold some form of debt — a number slightly higher than the national average of 72 per cent.
“Albertans have great opportunity for earning income and banks like that,” said Paul Shelemey, financial advisor with Shelemey Financial Manulife Securities. “Their risk is lower among the people who have employment, not unemployment; and everywhere you look, it says spend, spend, spend.”
He said individuals with steady income are more likely to be approved for credit and loans, which leads to debt accumulation.
Although many Canadians have debt, nearly half are taking steps to pay it down, with 49 per cent making at least one additional payment last year.
“Amidst warning on rising household debt levels and the prospect of higher interest rates, Canadians primarily focused these extra payments on reducing credit card and line of credit balances,” the report said.
Individuals between 25 and 34 years of age are the most likely demographic to have debt at 84 per cent. The number decreases slightly for people aged 35 to 44 at 83 per cent and declines further to 78 per cent for individuals between 45 and 54 years of age.
“The younger generation, if they want something, they have the opportunity to get it right now with no money down,” Shelemey said, adding this has been the case since the ’70s.
Although debt is an issue facing many Canadians, Christina Kramer, executive vice president with CIBC, said in the report that Canadians are less likely to seek advice regarding debt management.
“We know from past research that Canadians are more likely to seek financial advice about saving for retirement than they are about managing their debt,” she said. “Debt reduction takes effort and discipline about how your money is spent, but it also requires a thoughtful approach as to how to direct extra payments and reduce interest costs.”
Shelemey said more people ought to get advice regarding debt management, adding it is important for all ages to consult a financial advisor to discuss strategies to avoid debt.
He recommends individuals looking to pay down their debt consolidate debt into a low-interest payment.
Albertans were amongst the highest debt-carriers in the country, topped only by Manitoba/Saskatchewan at 77 per cent and Atlantic Canada at 78 per cent.
The telephone poll conducted by Harris/Decima questioned 2,003 Canadians between March 22 and April 2 of this year.
