MNP Consumer Debt Index - October (MNP 3 Minute Debt Break)

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he latest MNP Consumer Debt Index rises to 89 points as lower interest rates improve financial outlook. But the cost of living is forcing Canadians to make some tough sacrifices. 

The MNP Consumer Debt Index measures Canadians’ attitudes toward their consumer debt and gauges their ability to pay their bills, endure unexpected expenses, and absorb interest-rate fluctuations without approaching insolvency. Conducted by Ipsos and updated quarterly, the Index is an industry-leading barometer of financial pressure or relief among Canadians.

According to the latest report, nearly a third of Canadians say they have turned to bill-splitting strategies — such as carpooling, buying in bulk, sharing subscriptions, and childcare. More than one in 10 are saving money by moving in with friends, partners, or family members, or seeking additional roommates or co-living spaces. Nearly three in 10 Canadians say they’ve even resorted to eating less to save money.

Canadians are making other sacrifices to manage costs. Half  say they’ve tried to save money by grocery shopping more strategically. Nearly half also say they’re avoiding impulse purchases or have stopped eating in restaurants or getting take-out The bill-splitting trend is more common among Canadians aged 18 to 34 and those living in British Columbia and Alberta. 

The good news is these cost-cutting measures and lower interest rates have created breathing room in some household budgets. Canadians are building up the bank this quarter, reporting on average they have more money left over at the end of the month after all expenses in the last five years. Just over four in 10 Canadians say they’re $200 or less away each month from financial insolvency. That is the lowest recorded proportion since September 2018.

With Canadians expecting interest rates to continue falling over the next few years, perceptions of their ability to absorb interest rate increases have improved. A quarter say they’re much better equipped to manage an interest rate increase of one percentage point than they used to be, up three points since last quarter. More Canadians are looking positively to the future, with three in 10 expecting their debt situation to improve over the next year and fewer believing it will worsen.

Although inflation has eased and interest rates have fallen, many Canadians still feel the heavy burden of accumulated debt. Despite some relief, the difficult truth is that cost-cutting measures alone may not provide adequate support for those grappling with significant debt. For those feeling overwhelmed by bills and debt, seeking advice from a Licensed Insolvency Trustee is a crucial step toward long-term financial stability.  MNP’s extensive network of Licensed Insolvency Trustees provides free consultations in over 200 offices nationwide, delivering local, personalized support to help Canadians navigate their debt options.

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