Why Personal Debt is So Bad for WomenOct 14, 2018
Affordability is at a real concern for many Canadians.
Covering even basic expenses month to month is straining Canadians’ finances, according to results from the new Affordability Index, an Ipsos poll conducted on behalf of BDO Canada. And it’s clear that personal debt is making things worse.
Women account for the highest number of university grads in Canada (according to Statistics Canada). And when it comes to the workforce, women are eager participants, but, they face lower wages, high competition for jobs, and even longer working hours for their pay. Plus they tend to take on a higher level of familial responsibility.
Women are one of the groups singled out in our poll results as being…
- more likely to struggle to afford everyday necessities like clothing and transportation
- more likely to find it challenging to save for retirement
- least financially prepared for milestones like having children and purchasing a home.
We found that women are also more likely to carry “some” to “a lot” of personal debt.
Why personal debt is so bad for women
The truth is, a wide range of Canadians are in debt – our poll found that three-in-four Canadians carry personal debt. And nearly half of Canadians admit their income isn’t enough to allow them to live debt free. Shockingly, a quarter to half of Canadians say they even struggle to cover essentials like heat and water.
Getting out from under personal debt can be difficult for anyone. But women can face their own set of unique challenges.
Women are more likely to interrupt their career path (and their earning potential) to raise their children or care for aging or ailing family members. Because they’ve been away from their jobs, women also can face the reality of a long-term or even permanent loss of wages when they re-enter the workforce.
It’s an untenable situation, especially for women who already carry personal debt. The increased costs of raising a family along with reduced wages can quickly lead to more debt — just to make ends meet.
The more debt they accumulate, the more difficult it can be to pay it off — and the more difficult it can be to prepare for unexpected costs or long-term goals.
Reducing personal debt
For many women who are struggling with affordability reducing personal debt will take time, but it’s not impossible. And reducing debt now will increase security in the long run.
Start by finding a debt repayment method that works for you. Is consumer debt a problem? Are depending on a credit card or line of credit regularly to make ends meet? Then, getting rid of those high interest debts is critical.
The Financial Consumer Agency of Canada’s credit card payment calculator can help you make a plan that fits your finances.
If you’re using your credit card or line of credit to make to pay for essential expenses, like utilities, rent or groceries, consider talking to a professional.
A Licensed Insolvency Trustee (LIT) can review your personal finances and explain solutions that can help you pay off your debt and ensure you can make ends meet. And if debt is overwhelming your finances, an LIT will discuss formal debt options to help you resolve your debt, like a consumer proposal, or even bankruptcy (which is always a last option).