Concerning trends continue for third consecutive Consumer Debt Report

The age-groups hit hardest by inflationary pressures, Gen Z and Younger Millennials, have a reputation for being ‘soft’ and ‘entitled.’ But according to findings of the 2024 Consumer Debt Report by the Credit Counselling Society (CCS), among members of the Angus Reid Forum, these so-called ‘snowflakes’ are also the most likely of any age group surveyed to have taken action to remain financially stable during these volatile economic times.

“For the third year in a row we’ve seen a decrease in how confident Canadians feel about their current financial situation,” said Peta Wales, President & CEO of the Credit Counselling Society. “These are challenging times for a lot of folks. Taking on more debt, or eroding your savings to get by, will spell even more hardship in the future.”

The report found:

• 50% of Canadians aged 18-54 report having either sold personal items or believe there is a significant possibility that they will need to in the near future;
• 19% of 18 to 34-year-olds say they had to move back in with parents or relatives because of interest rate hikes and inflationary pressures. Another 21 percent report that there is a significant chance this could happen to them;
• Due to elevated living costs, 20% of 18 to 34-year-olds have already taken on a second job or started a side gig. Another 42% believe there is a significant possibility that they may need to do the same.
• However, with little relief in sight, 54% of 18 to 34-year-olds have taken on more debt to keep their finances afloat;
• Compared to one year ago, 49% who saw an improvement in their financial situation cited spending less on non-essential items. And among Canadians who report being worse off financially now compared to one year ago, a whopping 85% list spending more on essentials as a leading cause, 47% cite an increase in debt, and 38% mention emergency expenses contributing to this decline;
• Over the past year, Canadians have supplemented their income by dipping into savings (56%) and/or borrowing from credit cards as nearly half (44%) took on more debt.

“This is a concerning pattern we’ve started seeing a lot more often, especially with younger clients, and it’s simply not sustainable,” said Wales. “Savings can only last so long and depleting it robs you of future financial security. This is exacerbated by the need to take on more debt just to pay for living costs, at a time when no one knows when interest rates will reduce enough to provide relief to household budgets. The stress this causes will eventually affect every aspect of someone’s life.”

Mario Toneguzzi

Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list