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Tag: Credit counselling

  • Financial paralysis and how to get moving again

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    Canadians face financial pressure

      According to the data, Canadians remain under significant financial pressure, with a full 68% expressing concern about the cost of living. Almost a third (30%) of respondents are anxious about money, especially women and those making less than $50K per year, while Generation X worries about their retirement. 

      Compounding the issue, money insecurity is having a notable effect on how Canadians spend. Forty-two percent reported relying more this year on credit than cash, a 7% increase over last year’s numbers. Additionally, 48% carry debt, and 59% have more debt than last year. More than half (52%) pay off only a little bit more than a minimum amount due, resulting in higher balances—and less resilience for Canadians.

      Debt is being normalized

        A high cost of living and credit use aren’t new, but consider this: almost half of Canadians (45%) reported feeling “about the same” about their finances. Credit experts say that could be a problem. 

        “[I]t appears almost half of respondents characterize their feelings about their financial situation as being neutral when compared with last year—in other words, they are feeling numb to it,” states Peta Wales, President & CEO of the Credit Counselling Society in a press release. “Debt remains a source of stress and anxiety, and ongoing financial pressure can lead individuals to become desensitized to change, even as their balances continue to rise.”

        Invest your money or pay off debt?

        A comprehensive guide for Canadians

        Financial paralysis is a term used in the world of finance to describe the effect of money stress on some people. Signs include avoidance, inaction, and shutting down—or numbness. When in this state, simple financial tasks like using a budget, paying bills, or even checking accounts can feel beyond reach. Even worse, a person might overspend to compensate for negative feelings or out of a sense of helplessness. The primary solution—building a solid financial foundation—is a laughable suggestion to someone who’s gone numb.

        Snap out of it

          There’s no magic bullet for financial paralysis, but there are actionable strategies you can take to maneuver yourself in a strong position. That’s important, because research suggests that just like with compound interest, wins build on wins.

          Change your mind

          “Just as we learn language, customs, and social norms from the culture around us, we also absorb messages about money,” writes Nathan Astle in Psychology Today. Because of cultural money taboos, it’s difficult to talk about finances, and any perceived failure manifests as guilt and shame.

          If you want to find financial (and emotional) stability, it’s worth reaching out for help in this area. Therapists, peers, and support groups can help you untangle your feelings about money, while a financial advisor or credit counsellor can put your portfolio into perspective. 

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          Change your habits

          Although tedious, some money habits just work. Build (and stick to) a realistic budget. Prioritize paying down your debt. Build up an emergency fund.

          Change your timeline

          You just want a lifeline when you’re drowning in debt. You feel impatient because it’s uncomfortable—and because each passing month you owe even more.

          The truth is, paying down debt is a long-term project and you’ll be better off with a realistic sense of what it will take.

          Debt doesn’t just drain your bank account—it freezes your decisions. The stress and shame can make avoidance feel safer than action, but inaction only deepens the trap. Luckily, there are ways to get moving again. Face the numbers, make a plan, act consistently, and ask for the help you need.

          Get free MoneySense financial tips, news & advice in your inbox.

          Read more about debt:



          About Keph Senett


          About Keph Senett

          Keph Senett writes about personal finance through a community-building lens. She seeks to make clear and actionable knowledge available to everyone.

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    Keph Senett

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  • Holiday debt hangover: How to get your finances back on track

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    Recent surveys show a growing number of Canadians carry holiday-related debt into the new year and feel more financial pressure because of it. In this article, we’ll explain what’s behind this holiday hangover, why this type of debt has become so common, and provide practical steps to pay it down so you can get your finances back on track.

    The state of holiday spending & debt in Canada

    According to Spergel’s latest Financial Hangover survey, about half of Canadians (51%) carried new holiday debt into 2026, and nearly three in 10 are starting the year with over $6,000 in holiday-related balances. At the same time, 75% report feeling more financially stressed than in past years, and nearly one in five expect to fall behind on credit card payments.

    “These figures show how easily seasonal spending can morph into a long-term debt trap when you’re dealing with 19.99% or 29.99% APR. That ‘hangover’ doesn’t just go away, it grows,” says Ronique Saunders, Credit Canada Credit Counsellor. According to Spergel’s survey, nearly one in three Canadians say it will take six months or longer to recover financially from holiday spending.

    These impacts go beyond numbers on a statement. Carrying high balances increases your credit utilization, which can hurt your credit score and make future borrowing more expensive. High balances also trigger significant interest charges and monthly interest expenses, which can quickly drain your cash flow and increase the total amount you owe. And seeing a large balance month after month adds emotional stress, making it harder to save or plan for the rest of the year.

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    Many Canadians carry holiday debt into the new year because of a few common money habits. One is present bias—focusing on enjoyment now and pushing costs into the future. Another is optimism bias—expecting finances to recover without a clear plan. These habits are normal, but they can cause debt to stick around longer than expected, especially as credit card interest adds up.

    Step-by-step financial recovery strategies

    Understanding how common this “holiday hangover” is—and taking steps to tackle your debt—can help you regain control of your money and reduce both financial and emotional stress as the year begins. Here’s how to get started.

    1. Assess your current situation

    The first step to getting back on track is to figure out where your money stands. Pull out your January credit card and bank statements and tally up any holiday debt. Seeing the numbers in detail provides a foundation for every decision that follows.

    A helpful way to start is by creating a “financial photograph.” This is a snapshot of your finances at a specific point in time, showing what you own versus what you owe. To create a financial photograph, use a piece of paper or a spreadsheet and list everything you own (savings, investments, maybe a home) and then subtract what you owe, such as credit card balances or loans. This will give you a clear picture of your net worth, separate from your everyday budget.

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    “Understanding your complete financial situation allows you to identify, organize, and create a realistic plan to pay off what you owe,” says Saunders.

    2. Create a realistic 2026 budget

    Consider your budget a spending roadmap for the year ahead, taking into account a plan to reduce your holiday hangover debt. When creating a budget, you can use a budgeting app, spreadsheet or a simple piece of paper to list your income and expenses—including debt payments. Determine how much money you have to spend each month and compare it with how much you pay for various bills and items during that same period. This will help you identify where you can cut back. Those savings can then be directed to your debt so you can pay it off sooner.

    The goal is to allocate as much as you reasonably can towards the debt while still covering your necessary expenses. “A realistic 2026 budget doesn’t need to feel restrictive—it should simply reflect your values, priorities, and financial goals for the year ahead,” says Saunders.

    3. Prioritize high-interest balances

    Once you have a budget in place, you can analyze your cash flow to determine the best debt repayment strategy. Keep in mind that not all debt costs the same. Credit cards usually carry the highest interest rates, so paying them down first saves the most money over time. 

    Two common repayment strategies are the snowball and avalanche methods. The snowball method focuses on paying off your smallest balances first, giving you quick wins that build momentum. The avalanche method focuses on the highest-interest balances first, which reduces the total interest you pay and can shorten the overall repayment period. 

    Counsellor Tip: If your interest rates are over 20%, the avalanche method is almost always the better choice to stop the “bleeding” of your monthly income. 

    4. Increase cash flow

    Boosting the money you have available can speed up your holiday recovery. Look for temporary ways to earn extra income, such as freelance work, part-time jobs, or selling items you no longer use. You can also free up cash by reviewing subscriptions or non-essential spending and redirecting that money towards debt repayment. 

    5. Pay more than the minimum

    Minimum payments may feel manageable, but they keep you in debt longer and increase the total interest you pay. Whenever possible, aim to pay a larger portion of your balance—as much as your budget allows. 

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    Himank Bhatia

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  • Gambling apps fuel rising debt and addiction—here’s how to dig out – MoneySense

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    While those sums are above average, Kilner has watched both his tally of clients and the depth of their gambling debts balloon in recent years. “Ten years ago I didn’t see anyone, because you’d actually have to go into a casino,” he added. “It’s just the last two, three years.”

    Betting apps put young adults at risk

    The rise of online sports betting and casino apps has yielded big profits for gambling companies. But insolvency and psychology experts warn of dire consequences for a growing number of Canadians—young men, in particular—and recommend counselling, a payback plan, and self-examination for those needing to dig themselves out of debt.

    Compared to gamblers who exclusively played the lottery, Canadians who reported betting online over the past year were 45 times more likely to qualify as problem gamblers, according to a new report from Greo Evidence Insights, the Canadian Centre on Substance Use and Addiction, and Mental Health Research Canada.

    “Young adults are emerging as the group most at risk,” said Matthew Young, chief research officer at Greo, a not-for-profit research organization with expertise in gambling. Nearly one in three adults aged 18 to 29 place bets online, according to the poll, which was based on data from more than 8,000 respondents. “Those who do are far more likely to develop gambling problems and suffer related harms,” he said in a release.

    The sheer ubiquity of betting amounts to a constant risk for some, who carry a virtual casino in their pocket. “You can gamble walking down the street on your phone. You can gamble sitting in the comfort of your living room,” said Scott Terrio, manager of consumer insolvency at Hoyes, Michalos & Associates. “The former barriers to gambling—i.e., getting up off your ass and going to the casino or the track—aren’t there now.”

    Gambling losses and debt climb in Ontario

    Canada legalized single-event sports betting in August 2021, upending more than a century of prohibition on the practice in the hopes of winning back customers from offshore sites, U.S. casinos, and illegal bookmakers. Ontario threw open the door to private betting platforms, while other provinces including Quebec, British Columbia, and Alberta offer sportsbooks run by their lottery and gaming commissions.

    On top of being just a click away, daily fantasy sports companies such as DraftKings and FanDuel advertise relentlessly, as anyone who watched the recent Toronto Blue Jays playoff run can attest. “This is so prevalent and in your face,” Terrio said.

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    Typical debt totals for his clients range between $20,000 and $80,000, though he’s handled cases of up to $263,000. “I’ve seen statements where somebody was pulling cash advances out over the course of three or four days and it was in the tens of thousands from a few different banks,” he said.

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    In Ontario, the internet gambling industry saw monthly cash wagers rise 31% year-over-year to a record $8.6 billion in September, according to iGaming Ontario’s latest market performance report. Online casinos make up the bulk of that total, while non-casino betting—the category includes sports—saw by far the biggest increase at 39%.

    Official statistics on gambling debt are hard to come by, but Ontarians lost $329.4 million on the iGaming platform in September, 20% more than in the same month a year earlier.

    Managing debt after online gambling losses

    The path out of debt isn’t always pleasant. The first step is to acknowledge the problem, stop gambling—including by asking sites to ban you—and contact a non-profit credit counselling agency for financial advice.

    If the debt has spiralled, a second step is to work with a licensed insolvency trustee to consider a consumer proposal—an agreement with creditors to repay a portion of what’s owed, often within five years. “They like to see 30%, 40% depending on how bad the gambling was. But you get that at no interest,” said Kilner.

    Sometimes, creditors impose harsher terms on gambling debt because it tends to accumulate more rapidly, he said. “Normal debt generally builds up over time. And from the selfish perspective of the banks, they’ve probably made some money off you,” Kilner said. “They’ve been able to charge interest. Generally, with gambling, it’s quick.”

    Other experts said the percentage owed can range widely, and hinges on income, assets, and prior bankruptcies.

    Declaring bankruptcy is an alternative that typically results in a lower payback amount. But it wreaks havoc on credit scores and usually demands a much shorter timeline, often 18 months, said Terrio.

    Why online betting can become addictive

    The toughest part of the process may be confronting the deeper reasons behind addictive behaviour. “Ask yourself, am I doing it for entertainment?” said Kilner. If so, set a limit, as you might for a night out.

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    The Canadian Press

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  • Why are mortgages so expensive in Canada? – MoneySense

    Why are mortgages so expensive in Canada? – MoneySense

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    A total of three rate cuts passed down from the Bank of Canada since June have cumulatively lowered the cost of borrowing for Canadians by 75 basis points, from 5% to 4.25%, offering home buyers some much-needed relief in terms of affordability.

    This is according to the latest affordability report compiled by Ratehub.ca, which crunches the minimum annual income required to buy an average home in some of Canada’s major cities. (Ratehub Inc. owns both Ratehub.ca and MoneySense.) The report is based on September 2024 and August 2024 real estate data reported by the Canadian Real Estate Association (CREA). It illustrates how changing mortgage rates, stress test rates and real estate prices are impacting the income needed to buy a home. 

    The September edition (updated monthly, so bookmark this page) shows the required income lowered in 11 of the 13 housing markets studied, as the average five-year fixed mortgage rate dropped to 5.04%, compared to 5.16% in August. As a result, the corresponding average mortgage stress test rate—which tacks on an additional 2% to a borrowers’ contract mortgage rate—fell to 7.04% from the previous 7.16%.

    Let’s take a look at how that’s impacted home buyers across Canada.

    The best places to buy real estate in Canada

    Housing affordability across Canada’s major cities

    Check out the chart below to see how affordability changed between August and September in Canada’s main housing markets, based on the income required to qualify for a mortgage.

    September 2024: How much do you need to earn to buy a home in Canada?

    City Average home price in August Average home price in September Change in home price  Income required in August Income required in September Change in income
    Vancouver $1,195,900 $1,179,700 -$16,200 $224,000 $219,000 -$5,000
    Toronto $1,082,200 $1,068,700 -$13,500 $204,100 $199,800 -$4,300
    Hamilton $840,300 $831,500 -$8,800 $161,800 $158,740 -$3,060
    Victoria $866,700 $864,400 -$2,300 $166,420 $164,450 -$1,970
    Halifax $543,700 $538,100 -$5,600 $109,940 $108,000 -$1,940
    Calgary $586,100 $582,100 -$4,000 $117,360 $115,600 -$1,760
    Ottawa $646,000 $642,800 -$3,200 $127,830 $126,100 -$1,730
    Edmonton $400,200 $399,400 -$800 $84,850 $83,990 -$860
    Winnipeg $361,800 $362,500 $700 $78,140 $77,600 -$540
    Fredericton $311,300 $312,000 $700 $69,310 $68,860 -$450
    Regina $319,700 $320,700 $1,000 $70,780 $70,360 -$420
    Montreal $535,700 $543,400 $7,700 $108,550 $108,900 $350
    St. John’s $354,600 $364,100 $9,500 $76,880 $77,880 $1,000
    Data in the chart is based on a mortgage with 20% down payment, 25-year amortization, $4,000 annual property taxes and $150 monthly heating. Mortgage rates are the average of the Big Five Banks’ 5-year fixed rates in September 2024 and August 2024. Average home prices are from the CREA MLS® Home Price Index (HPI).

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    Canadian cities where affordability improved

    Where in Canada is owning a home becoming more affordable?

    Vancouver: A chilly start to the autumn market

    Vancouver topped the list of cities with most-improved affordability, largely due to the fact that the average home price absorbed a $16,200 drop from August. Make no mistake,—this is still Canada’s most expensive housing market with an average property price tag of $1,179,700. But demand has been quite cool coming out of the summer months. According to the Greater Vancouver Realtors, sales fell 3.8% year-over-year in September, while the supply of new listings rose 12.8%, leading to an easy buyers’ market. As a result, Vancouver home buyers need to earn $5,000 less than they did last month to qualify for a mortgage on the average-priced home, at an income of $219,000.

    Toronto: A month of flat sales

    The city of Toronto came in second, as home prices continue to fall within Ontario’s largest city; the average property sold for $1,068,700, $13,500 less than it did in August, according to the Toronto Regional Real Estate Board. This is largely due to the fact that sales were unchanged from the previous month (though things are improving on an annual basis, coming in 8.6% higher than in 2023). Meanwhile, fresh supply continues to flood the market with new listings, which surged 35.5% year-over-year. Combined with easing mortgage rates, the average Toronto home buyer saw their required income shrink by $4,300, to $199,800.

    Hamilton: Hovering below the historical average

    Rounding out the top three cities is Hamilton, which has long been a popular Southern Ontario real estate destination, without the million-dollar price tag that characterizes neighbouring Toronto. The average home price in Hamilton in September came to $831,500, a decrease of $8,800 from August. The Association of Hamilton-Burlington reports that while sales were brisk in September, they continue to lag 2023 levels by 4% year-to-date and remain 28% below the long-term average. Meanwhile, new listings and inventory levels continue to rise, now sitting at a cumulative five months. That’s all cooled home prices, and as a result, Hamilton home buyers need to earn $158,740 to buy a home, $3,060 less than they did in August.

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    Penelope Graham

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