Personal Finance

51% of Canadians living paycheque to paycheque. Are you?

  • Last Updated:
  • Sep 17th, 2014 12:56 pm
Tags:
None
[OP]
Sr. Member
User avatar
Jan 29, 2008
634 posts
92 upvotes

51% of Canadians living paycheque to paycheque. Are you?

[QUOTE]The Canadian Payroll Association says more than half of Canadians -- 51 per cent -- would find it difficult to meet their financial obligations if their paycheque were delayed by a single week. That was up from an average of 49 per cent over the past three years.

For those aged 18 to 29, the number is even higher -- 63 per cent report living paycheque to paycheque.

Meanwhile, more than a quarter of respondents -- 26 per cent -- said they probably could not come up with $2,000 over the next month if an emergency expense arose.

At the end of last year, Canadians owed a total of $27,368 on such things as lines of credit, credit cards and car loans[/QUOTE]

Do you think this is mostly because people are more irresponsible and crave short term gratification without considering the long term consequences? Or is this mainly due to the low interest rates, inflation, and an overpriced housing market?
139 replies
Banned
User avatar
May 12, 2004
9759 posts
4091 upvotes
Ottawa
I'm not sure what their definition of paycheck to paycheck means...I keep just enough money every month to pay my bills yes. I live on my credit cards yes. I have never not made a full payment prior to due date. So that makes me a month behind cash-wise right?

The rest of my money is invested at the source in SOP and stock purchase plan, the rest doesn't see my chequing account and is deposited in a split between a MF account, some in a stock trading account, some in a RRSP account which I later use for GIC's.

If push came to shove could I get liquid money out of this in a week? Probably. Am I living paycheque to paycheque? Yeah literally.

IMO not living paycheque to paycheque means the banks win and you're leaving money on the table. Hence why banks just loooove to tell you that you need thousands in a garbage bank account.
Censorship is telling a man he can't have a steak just because a baby can't chew it.
- Mark Twain
Deal Addict
Jan 15, 2009
1031 posts
356 upvotes
Just north.
Living paycheque to paycheque probably means that you have no asset, nothing to support you if your paycheque is late, or that you're fired. OP's article probably points to people who would lose their house/car/accommodation if the pay isn't on time.

Most financially savvy people know the importance of investing, and wouldn't leave their money sitting idle in a chequing account anyway. My account is always close to zero or in the red, but that's because I always dump the majority of my pay into by online broker to invest.
Deal Expert
Aug 22, 2011
27374 posts
13331 upvotes
Ottawa
I interpret "living paycheque to paycheque" as not living within your means; thus accumulating large consumer debts!
Sr. Member
Aug 6, 2014
757 posts
199 upvotes
Ottawa, ON
i interpret paycheque to paycheque as meaning that if you miss a paycheque you can't pay your bills.

for the 18-29 range, it's probably a combination of not being able to save, and not making very much money. at that age you want to have fun which costs money. i know there's a handful of people living at home at age 26 and eating canned beans all day and never going out and saving 90% of their paycheques and are terrified of girls because they can be expensive, and while that's great and everything, i can totally see it both ways.

in addition most people at 18-29 probably only have a bachelor degree, or a master's degree at best, which means they're likely riddled with student debt, and can't find a good job anyway. most of them probably make about 40k/year and live in a city that they can't really afford to live in.
Newbie
Aug 4, 2014
49 posts
10 upvotes
Calgary, AB
Shady_Dealer wrote:
Sep 10th, 2014 9:45 am
Do you think this is mostly because people are more irresponsible and crave short term gratification without considering the long term consequences? Or is this mainly due to the low interest rates, inflation, and an overpriced housing market?
I would say that can is the reason people live paycheque to paycheque: the housing market as taken off upwards over the past years but wages have stagnated. I assume this 51% of Canadian have more than 40% of their monthly budget going to mortgage payments. Considering also that utilities:water, power, waste disposal,... have also skyrocketed that puts many, if not the majority of household, in a precarious financial position.
Deal Expert
User avatar
Oct 26, 2003
30243 posts
2468 upvotes
Winnipeg
vkizzle wrote:
Sep 10th, 2014 10:43 am
I interpret "living paycheque to paycheque" as not living within your means; thus accumulating large consumer debts!
yeah, if i were to spend all my pay cheque, which can easily be done, then i be living pay cheque to pay cheque, some celebrity making millions go broke all the time
Deal Guru
Feb 9, 2006
10172 posts
4295 upvotes
Brampton
So this leaves 48% not living paycheque to paycheque.
The 1% hands out 100% of the paycheques.
Banned
Mar 4, 2010
209 posts
15 upvotes
yup..i live paycheck to paycheck.. as in if I didn't get paid this week, I'll have to move money around to make sure there's enough cash in my account to pay bills and maintain min balance to not incur bank fees.
Deal Fanatic
May 9, 2007
6050 posts
1140 upvotes
Vancouver Island, BC
It seems to me that these two articles reflect a clear divergence among Canadians.

Canadians Average Net Worth Up Nearly 8%

http://www.ctvnews.ca/business/canadian ... -1.1954832

Canadian workers saving less; more living paycheque to paycheque

http://www.ottawacitizen.com/business/C ... story.html

Half of the population is near financial ruin while some unknown portion of less than half of the population (because it is average, not median) is increasing their wealth at four times the rate of inflation and much more quickly than increases in GDP.
Earthlings, you're evicted.
You are not getting the damage deposit back.

God
Deal Expert
User avatar
Oct 26, 2003
30243 posts
2468 upvotes
Winnipeg
fisher44 wrote:
Sep 10th, 2014 11:07 am
i interpret paycheque to paycheque as meaning that if you miss a paycheque you can't pay your bills.

for the 18-29 range, it's probably a combination of not being able to save, and not making very much money. at that age you want to have fun which costs money. i know there's a handful of people living at home at age 26 and eating canned beans all day and never going out and saving 90% of their paycheques and are terrified of girls because they can be expensive, and while that's great and everything, i can totally see it both ways.

in addition most people at 18-29 probably only have a bachelor degree, or a master's degree at best, which means they're likely riddled with student debt, and can't find a good job anyway. most of them probably make about 40k/year and live in a city that they can't really afford to live in.
so basically, a personal choice.
Deal Expert
User avatar
Oct 26, 2003
30243 posts
2468 upvotes
Winnipeg
Cas77 wrote:
Sep 10th, 2014 10:31 am
I'm not sure what their definition of paycheck to paycheck means...I keep just enough money every month to pay my bills yes. I live on my credit cards yes. I have never not made a full payment prior to due date. So that makes me a month behind cash-wise right?

The rest of my money is invested at the source in SOP and stock purchase plan, the rest doesn't see my chequing account and is deposited in a split between a MF account, some in a stock trading account, some in a RRSP account which I later use for GIC's.

If push came to shove could I get liquid money out of this in a week? Probably. Am I living paycheque to paycheque? Yeah literally.

IMO not living paycheque to paycheque means the banks win and you're leaving money on the table. Hence why banks just loooove to tell you that you need thousands in a garbage bank account.
actually i got HELOC now so i can live pay cheque to pay cheque, instead of keeping some emergency funds in my bank account i will dump it all into investments, HELOC can be my emergency funds, now i just made that statistics bigger
Deal Expert
User avatar
Oct 16, 2001
76501 posts
1568 upvotes
Depends on the month and what happens. We budget for everything, or try to. But it seems there is always something that comes up. We have had a lot of stuff breaking this year for some reason
Deal Addict
Sep 6, 2010
1686 posts
430 upvotes
Vancouver
ArmadilloTamer wrote:
Sep 10th, 2014 11:18 am
I would say that can is the reason people live paycheque to paycheque: the housing market as taken off upwards over the past years but wages have stagnated. I assume this 51% of Canadian have more than 40% of their monthly budget going to mortgage payments. Considering also that utilities:water, power, waste disposal,... have also skyrocketed that puts many, if not the majority of household, in a precarious financial position.
And just think what will happen when interest rates/mortgage rates start to rise.
Banned
Mar 4, 2010
209 posts
15 upvotes
gwplant wrote:
Sep 10th, 2014 12:10 pm
And just think what will happen when interest rates/mortgage rates start to rise.
well we've been thinking about that for 5+ years now... and each year it's it'll go up in next year or two..but ends up dropping some more.

the smart people would've leveraged the low rates during this time and built up more equity and paid off more of the mortgage while this free ride continues some more.

Top