According to a recent study, conducted by Harris/Decima for CIBC, debt is affecting many people. The study found that, combined, 77 percent of Manitoba and Saskatchewan residents hold some form of debt. This number is higher than the national average of 72 percent. Though many are in some form of debt approximately 56 percent of residents have contributed, at least, one lump sum payment in the past year. This also being higher than the national average of 49 percent, which is a good approach to lessening the amount of interest paid towards debt in the end. It ultimately reduces the amount of interest paid saving you money in the long run.
Broken down the 77 percent of those holding debt include those with one debt product (15 percent), two debt products (15 percent), three or four debt products (31 percent), and those with five or more (16 percent).
Residents in these two provinces have given priority to paying of credit card debt, 62 percent. This is followed by 46 percent paying off their lines of credit, 22 percent paying a lump sum towards their mortgage, 15 percent towards a loan, and six percent have made a lump sum payment towards their student loans.
Surprisingly it was discovered that 84 percent of people between ages 25 and 34 hold debt, while 83 percent of those 35 to 44 also hold some form of debt. By the age of 45 it seems that debt is likely to decline.
"Debt management is top of mind for Manitoba and Saskatchewan residents, and these poll results show that many are taking steps towards reducing their debt," said Larry Tomei, Senior Vice President, Central Canada, CIBC.
In the area there seems to be an increased awareness regarding the importance of correctly managing debt, however, it is still a topic that is less likely to be asked about. Residents choose to seek financial advice concerning saving for retirement.
Suggested advice for paying off debt includes making lump sum payments, thus, reducing interest costs. Working with an advisor can help to minimize overall interest costs through "utilizing debt products that offer a lower interest rate," and will help strategize paying off the balances in a specific time frame. An important suggestion is to make more than the required payment to minimize overall interest costs, the more you can pay up front then the less you pay overall. It is also suggested to use any number of free budgeting tools to help keep track of your finances.
