Rising interest rates and inflation are forcing many Atlantic Canadians to make tough budget decisions to make ends meet.
That was one of the findings contained in the latest MNP Consumer Debt Index released earlier in July.
It found that six in 10 Atlantic Canadians say they are already feeling the effects of recent interest rate increases.
Nearly half of us say we could be driven closer to bankruptcy due to rising rates, a number that is higher than in other provinces.
Tara Silliker, senior vice-president with MNP Ltd., said it could be that more of us are living paycheque to paycheque.
“Small changes can make a bigger difference to them than someone that may have more space in their budget to absorb some of those changes,” Silliker said in a recent phone interview.
The latest report also found that nearly half of Atlantic Canadians are cutting back on non-essential purchases, such as travelling, dining out, and entertainment, while about two in five are buying cheaper versions of everyday purchases.
About three in 10 of us have been forced to start looking at our essential expenses, like food, utilities, and housing.
“Atlantic Canadians are doing their best to adjust their budgets, but households will face increasingly difficult choices about what to cut as the cost of living continues to soar. Some could find themselves piling on debt to keep up with their monthly bills,” said Silliker.
Nearly six in 10 say they will be in financial trouble if interest rates go up much more, and more than a quarter say they are not financially prepared to deal with an interest rate increase of one percentage point.
Silliker said we all should be looking at our current expenses, whether or not we are facing financial difficulty.
“There’s really only two ways to improve your budget: you either have to reduce your other expenses or you have to increase your income,” she said.
Nearly half of Atlantic Canadians are concerned with their ability to cover all living and family expenses in the next year without going further into debt.
While nearly three in five of us are worried about the ability to repay our debts as interest rates rise.
Silliker said those concerned about debt repayments should speak with a licensed insolvency trustee.
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