Rising cost of living forces New Brunswickers to make tough sacrifices: Three in 10 are eating less to save, sharing expenses from housing to carpooling, childcare and groceries
Nearly half say even if interest rates decline, they are concerned about debt repayment (48%), a four-point increase since last quarter.
MONCTON, NB – October 16, 2024 – Under the burden of high living costs, Atlantic Canadians are making difficult sacrifices and finding ways to share expenses to make ends meet and save money. According to the latest MNP Consumer Debt Index, conducted quarterly by Ipsos, nearly a third (32%) of Atlantic Canadians report turning to bill-splitting strategies such as carpooling, buying in bulk, sharing subscriptions and childcare, and living with others. More than one in 10 (13%) say they’re saving money by living with friends, partners, or family members, or seeking out additional roommates or co-living spaces. Nearly three in 10 (27%) Atlantic Canadians say they’ve even resorted to eating less to save money.
“As Atlantic Canadians navigate the high cost of living, we’re seeing a bill-splitting boom take shape. Individuals are demonstrating their adaptability by employing strategies like sharing expenses and living arrangements. It also highlights the financial pressures they’re under. The difficult realities of soaring living costs are driving people to explore alternative ways to cut back,” says Tara Silliker, a local Licensed Insolvency Trustee with MNP LTD. “What I find especially worrying is that nearly three in 10 report reducing their food intake just to stay afloat.”
Atlantic Canadians are making other sacrifices to manage costs. Nearly three in five (57%) say they’ve tried to save money by grocery shopping more strategically. And nearly half say they’re avoiding impulse purchases (45%) or have stopped eating at restaurants or getting take-out (47%).
Cost-cutting measures and lower interest rates create breathing room in some household budgets
Perhaps, in part, due to prudent cost-cutting efforts and the recent dip in interest rates, Atlantic Canadians are reporting some slight improvements in their financial situation. This quarter, they report having $614 (+$15) left over at the end of the month — although this is the lowest among the provinces. Still, two in five (40%, -8 pts) Atlantic Canadians say they are $200 or less away each month from financial insolvency, down a significant eight points since last quarter.
“Even with lower interest rates and the cost-saving habits they’ve implemented, Atlantic Canadians have less money left over at the end of the month than those in other provinces,” says Silliker. “That said, we’re seeing a positive trend in the number of individuals on the brink of insolvency, with easing financial pressures offering some much-needed flexibility in their budgets. However, two in five are still in a precarious situation, highlighting that a notable minority continues to struggle.”
Pessimism about financial outlook, debt grows despite falling interest rates
While Atlantic Canadians expect interest rates to continue falling over the next few years, perceptions of their ability to absorb interest rate increases have weakened; one in five (21%, -6 pts) say they’re much better equipped to manage an interest rate increase of one percentage point than they used to be, dropping a significant six points since last quarter. Moreover, Atlantic Canadians are the least likely to look positively to the future compared to the rest of the provinces. Only a quarter (26%, -9 pts) expect their debt situation will improve over the next year, while fifteen percent believe it will worsen (15%, -1 pt).
Despite three interest rate cuts this year, more Atlantic Canadians this quarter (48%, +4 pts) say they’re concerned about their ability to repay their debt, even if rates continue to decline. Significantly more say they’ll be in financial trouble if interest rates go up, with three in five (63%, +9 pts) indicating they would be in trouble.
“Although we are seeing inflation and interest rates decline, more Atlantic Canadians feel burdened by the debts they have incurred,” explains Silliker. “The fact remains that bill-splitting strategies may not be enough for those dealing with substantial debt. Individuals should seek support from a Licensed Insolvency Trustee, who can advise on the full range of debt-relief solutions — Bankruptcy being just one of many options.”
Licensed Insolvency Trustees provide unbiased advice on options, including debt consolidation, debt management plans, budgeting, Consumer Proposals, and Bankruptcy. They are the only federally regulated debt professionals authorized to administer government-regulated insolvency solutions such as Bankruptcies and Consumer Proposals.
“It’s possible that bill-splitting tactics can deliver temporary relief, but they often fall short of addressing the underlying debt problems. For those feeling overwhelmed by their financial obligations, speaking with a Licensed Insolvency Trustee is an effective way to explore more sustainable debt relief solutions,” says Silliker.
MNP’s extensive network of Licensed Insolvency Trustees provides free consultations in over 200 offices nationwide, delivering local, personalized support to help individuals navigate their debt options.
Looking ahead to how Atlantic Canadians plan to cut costs or save money in the year to come, the survey revealed the following:
Atlantic Canadians' top money-saving strategies for the next 12 months
- Bill splitting – 25%
- Going thrift shopping – 18%
- Creating a budget / recording all expenses – 17%
- Cancelling Subscriptions – 17%
- Reducing utility consumption – 16%
- Finding free or low-cost entertainment – 15%
- Avoiding impulse purchases – 14%
- Grocery Shopping Strategically – 14%
- Cutting vices – 13%
- Moving in with family, friends, a partner, or roommates – 12%
- Stopping eating in restaurants or getting takeout – 12%
- Moving somewhere more affordable – 11%
- Splitting grocery costs / buying in bulk with roommates, friends, or family – 11%
- Negotiating bills – 9%
About MNP LTD
MNP LTD, a division of the national accounting firm MNP LLP, is the largest insolvency practice in Canada. For more than 50 years, our experienced team of Licensed Insolvency Trustees and advisors have been working with individuals to help them recover from times of financial distress and regain control of their finances. With more than 240 offices from coast to coast, MNP helps thousands of Canadians each year who are struggling with an overwhelming amount of debt. Visit MNPdebt.ca to contact a Licensed Insolvency Trustee or use our free Do it Yourself (DIY) debt assessment tools. For regular, bite-sized insights about debt and personal finances, subscribe to the MNP 3-Minute Debt Break Podcast.
About the MNP Consumer Debt Index
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.
Now in its thirtieth wave, the Index has increased to 89 points, up four points since last quarter. Visit MNPdebt.ca/CDI to learn more.
The data was compiled by Ipsos on behalf of MNP LTD between September 6 and September 11, 2024. For this survey, a sample of 2,000 Canadians aged 18 years and over was interviewed. Weighting was then employed to balance demographics to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.5 percentage points, 19 times out of 20, had all Canadian adults been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to, coverage error and measurement error.
Tara Silliker
Senior Vice President
CIRP, LIT, CPA, CA
