A new survey from Manulife Financial suggests almost 40 per cent of Canadian homeowners have been “caught short” when it comes to paying bills in the last year.
Many of the people left struggling had to access a line of credit, borrow from family members, or worse, use a high interest credit card to pay their bills.
“The challenge faced by many Canadians is that their income is relatively stable from month-to-month, but their expenses can vary significantly,” said CEO of Manulife Canada Rick Lunny in a statement.
“Access to rainy day savings or a low-cost line of credit are good options to safeguard against these fluctuations. However, if your backup plan is to carry high-interest credit card debt or borrow from a family member – you could be putting undue stress on your finances or relationships.”
While a high number of homeowners felt they were “somewhat prepared” to deal with unexpected household expenses, the number of people who felt they couldn’t pay their bills might suggest otherwise. Fewer than one in four Canadians has more than $5,000 set aside for an emergency and 50 per cent have $1,000 or less.
Lunny says it makes more sense to use savings to pay down debt rather than continue to have debt along with a cash reserve.
Here in Vancouver, two thirds of those surveyed felt the city was unaffordable when it comes to housing. Nationally, that number drops to 38 per cent.
The survey polled 2,372 Canadians in all provinces between the ages of 20 to 59 who had household incomes of $50,000 a year or more. It was conducted between July 22 to August 7 of this year.