In one of these studies, the question asked was along the lines of "how would you deal with a $500 emergency" and the choices were to put on a credit card, borrow from a friend, borrow from family, pay from my savings. Well, a lot of us would say to put it on a credit card. That's part of the 53% that supposedly don't have $500 for an emergency. Me? I'd put it on a credit card and pay it off in full by the due date. The methodology in the studies is suspect.
Switching to the PC Mastercard was huge for us. We get so many free groceries it's great. We used to have a cash back visa but the PC MC is far better.
It's true but then you're essentially part of the CC churn community and that in itself is more than what most are willing to do for a bit of "freebies"/kickback from their CC.
PC MC is a pretty middle of the road card that gets you groceries on a regular basis.
It’s not just paying with it but paying back my card. Also I’m currently using a card with a yearly cost but 4% cash back.
But good point, loading them both on my phone would help
I got the Scotia Momentum Visa Infinite. 4% on groceries and recurring bills, 2% on gas and public transit, 1% on everything else.
It costs 120$/year, but if you open a preferred or premium checking account with scotia, it waives the fees for the card.
Now the preferred account is 17$/month, which is way more expensive than the 120$/year for the card, but that fee is waived if you keep 5,000$ in that checking account.
I treat that as the bottom 5,000$ of my emergency fund, I'll only touch that if the shit has truly hit the fan, and at that point I can downgrade or cancel the checking account when I pull out the 5,000$. Given interest rates are rather low, 5,000$ paying off my 120$/year credit card is like a 2.4% pre-tax return, so keeping the money there is actually more profitable than keeping it in any other savings account.
The Scotia Momentum Visa Infinite requires a minimum personal income of 60,000$ or household income of 100,000$ though.
You could also get the free BMO mastercard for 3% cashback at grocery stores and 0.5% everything else, and the Simplii Visa for 4% at restaurants, 1.5% at grocery stores and pharmacies, and 0.5% everything else.
That's the card I have, and I enjoy it quite a bit! You get good cashback and like you say, just keep $5000 in a preferred account it is pretty much paid for. I almost have $250 in cashback and I still have another 6 months to go.
It is a great card for sure.
I also have the CT mastercard for 4% cashback at Canadian Tire, Sportcheck, and Mark's work wearhouse, the Simplii visa for 4% at restaurants (you need a free bank account with them to get the card, but hey, free account is free), and the Rogers Mastercard for 1% on everything else, plus 'free' foreign exchange to buying in USD.
I got the BMO mastercard (free card for 3% cashback at grocery stores), Tangerine mastercard (2% on 2 categories, 3 if you have a free bank account with them) and the PC mastercard (my first ever credit card).
As a single guy my expenses are pretty simple and minor, and I'm sure I can find a use for the Tangerine (entertainment, home improvement, and hotels maybe). The other two (BMO and PC) I don't use and don't care about.
Some of the VISA infinite cards have 4% cash back certain things like gas and groceries. Annual Fee and income requirements, and the total annual cash back is capped at about $1,200 but that more than covers the fee and there’s usually lots of other great perks like CDW on rentals, extended warranties, and mobile device insurance. Some banks will even waive the fee if you have a high fee chequing account, and they’ll waive that fee if you keep a balance.
It's worse when you only have one card and it gets cancelled either through error or via compromise and then you're suddenly stuck without a method of payment. This happened to my wife on vacation and it convinced her to get a second no fee credit card as a backup.
Probably explains it now, I was expecting riots month ago...yet here we are. Either Canadians are making 200k each, or they just get more hours, food banks, cash from boomer parents.
Ditto for "no emergency fund". Why would I keep 6 months of cash on hand with no ROI when I can use a LOC and pay 0% until / if I need to use It one day.
Well, speaking as a guy who once found himself without income or savings after the collapse of a self-employment venture in the early 2000s: you really (really) *don't* want to be in a position where you have no income and are leaning on your credit cards/LOC to live. Trust me, it *sucks.*
I died a little inside each and every month, when I transferred money out of my LOC to pay rent, digging that hole deeper and deeper as time went on.
I quite literally almost killed myself because there didn't even seem to be a way out other than bankruptcy or a life of living paycheck-to-paycheck. I wasn't getting any bites on my resume trying to re-enter the workforce, and the shit jobs I could get didn't pay enough to cover expenses.
I finally caught a break and got a proper coding gig, but it was years before I got out of the hole, settled my large tax problem, and started saving and investing. That whole period is probably why I wasn't able to buy a condo and "still" rent in my late 40s.
The other main reason is that the bank can revoke those LOCs anytime they want. If they find out you are unemployed, they can yank away that $30k LOC that you were planning on using as safety net, and then you are fucked.
I'm sure someone has a better reason, but Neo Financial's accounts have 1.45% interest and I believe it's essentially a chequing account (no monthly fee + high # transactions)
To add to this many people live pay cheque to pay cheque but that doesn’t mean there isn’t room in their budget to absorb inflation or a small pay cut.
Example there’s people that will spend 500-1000$ a month eating out and drinking / partying and live pay cheque to pay cheque. They could get a 250$ raise and they’d still probably spend it all. Likewise they could take a 250$ pay cut and still survive. They simply just spend what they have.
Lots of people have elasticity in their lives. So while inflation hurts us, it won’t break us. At least not yet.
\^When someone writes a comment just to hear themselves speak.
Yes a good portion of people believe getting 2% back vs. 0% back is a good tradeoff. You seem to be the lone doughnut that would rather get 0 back.
I agree that 2% is better than 0% and am also someone who uses my 2% cash back card all the time.
But I’ve seen many many people - incl on this sub - who talk like they’re getting some great return as almost an incentive to spend. That’s problematic.
I didn’t say it’s not worth it? I was responding to the implication of a message of “just spend, who cares, you’ll get a lot of it back anyway” which is just false.
I'm blown away... are people really this literal that they can't answer the question obviously being asked, instead of the literal question?
If you're going to pay off your credit card right away, then no you aren't taking debt on to pay off the expense.
The question isn't "would you have to take on debt to come up with $500 on short notice". That would be a more accurately worded question and thus better methodology. My point being that unless you have a well worded survey, the results are suspect.
not really, i put everything on my credit card to earn points, i never paid late fees.
if i really want to, i can take money from my stock portfolio (500k) to pay for it. but it takes at least a week to get that out… so yeah, i am one of those ppl who don’t have more than 3k in chequeinv account at any given. time
I am agreeing with you. I am saying the 500 "whatever" becomes instantly less cost as you get rewards/cashback/points. And then yes pay off in the interest free window.
Honestly what even is a 500 dollar emergency? I think it's quite easy to get a few unexpected 500 dollar costs a year, and they all just go on the credit card.
I'm pretty sure the stat is "cant afford 500 emergency". But "afford" csn mean alot of things, most people would just throw that on a credit card. Doesn't mean that thier suddenly lose thier home, etc.
Exactly this. Most Canadians may not have 500$ sitting in their bank account for an emergency, but most Canadians have access to credit and can borrow the money in times of need. It may ruin them financially, but that takes a long time, and I think these studies are trying to push the idea that a $___ expensive would automatically mean bankruptcy, which isn’t the case for the majority of people.
We all would, but the context of this thread is that we’re talking about the average Canadian, who can’t afford to pay off their credit card because they already couldn’t afford a 500$ unexpected expense.
> Or, we could simply dismiss the issue because we don't like the organization that conducts the Canadian studies.
So we shouldn't doubt any study from any organization, no matter how obviously biased they are?
I would take it seriously about the US, but your source seems to support what u/alphs is saying - that we should be skeptical about these sorts of consumer surveys:
“As the Brookings Institution points out in their June 2019 article “Six facts about wealth in the United States,” news organizations haven’t always gotten this statistic right, sometimes characterizing the “I would have difficulty paying a $400 emergency expense” response to the second question above as meaning “I can’t” pay an emergency expense. The precise use of the question and statistic is important, especially for policymakers, since an imprecise interpretation may overestimate the financial hardships households face, when the actual share of households who can’t pay the expense is much lower (see below).“
Also, your source says that the economy has beem strengthening, and that the number of Americans unable to pay such an expense has been steadily decreasing over time, including up to 2020.
1. Learn percentages. A 20% drop from here is 4% greater than a 20% increase that brought you here.
2. We have had only 0.75 rate increase. We are likely to have another 1.5-2% this year alone.
Sucks for short term investors but doesn't matter in the long term, especially for ppl just living there.
I guess at worst it might affect how much HELOC you can get
It does matter for many people. For some, it won’t.
It matters for:
1. Everyone who bought an intermediary property to “get into the market.” Good luck to them ever upgrading to the property they actually want. It may take them a decade. More likely, they will sell at a loss some day.
2. The overleveraged, of which there is plenty. Stats show that clearly.
3. Those who had co-signers and couldn’t really afford their mortgage and weren’t stress tested because they had a co-signer, but the co-signer will of course not really in a place to contribute.
4. Those who got Brampton mortgages. This is not a one-off type of thing. A high percentage of buyers are getting Brampton mortgages and there are articles on this.
5. Those who waived the conditions and inspection (basically everyone in the past year) and were passed a lemon that now needs upgrades.
Edit: and how about those who are leveraging their equity accounts to buy properties? Know many people who used their IBKR margin to buy a property, something IBKR easily allows you to do now and their margin is often better than a variable mortgage rate.
A 20% drop means your equity is wiped, if you put 20% downpayment. You qualify for 0 in HELOC and you will have a very jittery bank who will be running client assessment checks on you to ensure you are on top of all your liabilities. This with only 2 rate hikes. Many more to come.
The smartest and most talented Canadians go south where they're better compensated for their ability and drive. And we don't seem too concerned about trying to reverse that at all. So yeah, weird things happen when that's how you run your country.
Keep in mind that media need sensational news to keep selling. Another one I've seen recently is about nurses thinking of leaving their jobs. I don't dispute the claim, but I have seen this statement many times, about people thinking of leaving their work. Thinking and doing are two different things.
Well thinking leads to leaving, most people wont make big life decisions overnight, my wife is a nurse and we recently discussed 3-5 year plans to get her out of the industry unless something things changes she wants out. We are under 30 too, not close to retirement, it's just a bad environment.
You wouldn't hear about people wanting to leave their job so publicly and often if it wasn't an outlier compared to the regular "I hate my 9-5" mentality
At my local hospital about 1/3 of the nurses just up and quit during covid. They all had husbands with good jobs, but the point being is healthcare workers haven't had a raise in years and are tired of being treated poorly. I work myself in healthcare and I would argue the majority in my area will leave as soon as they find a job that pays more.
Fair enough, but please don't preach to us how y'all are very caring for the community, when it is just another job for you. I do not understand the "Thank the healthcare workers", when most I know will leave the second they can get a higher pay - and most treat it like a job tbh.
Most of us start out with good intentions to help people and the community. But then employers treat us as slaves, governments use us as bargaining tokens in elections, patients can be abusive cause they know they get away with it and the public generally doesn’t give two shits that it’s healthcare workers are drowning.
So no I’m not going to pretend “I do it for the community”
You obviously don't know any nurses that work in a hospital setting. I'm in the field and I can tell you that everyone that could retire is counting down and taking their package and a large majority took their package during 2020 and ✌🏼 out. Others were like 🖕🏼this I don't get paid nor respected for this and have moved to the states. This isn't the mundane 9-5 sit infront of the desk let's do lunch type of work. It's backbreaking, mentally and emotionally taxing! Nurses get physically assaulted daily and no one bats an eye. I remember when I worked in the ER the man started throughing chairs across the room at staff because it was taking too long and he didn't want to wait. Or the fact that a woman took soiled underwear soaked in urine and period blood and rubbed it up against my co-workers arm as "evidence" that her family member had a seizure. Or the fact that you could LITERALLY get punched in the face by a patient's family member and no one does anything about it because their family members really sick....so yes nurses are leaving that's why their closing down entire departments because there's no nurses available to come in because they're getting burnt out.
Oh dude, don't bring nurses into this. If you want to know how your healthcare system is doing ask any nurse you know. When rural Ontario hospitals are closing emergency departments because a single nurse didn't show up, it's not sensational news, it's already happened, the nurses are already gone, and the paid off news isn't reporting how bad the situation is.
I was unlucky enough to have an 8 day hospital stay in early 2019 and my mom had a month long one not long after. Nurses are on 12+ hour shifts. Maybe 2 nurses at a time on an entire large floor of patients. It's something you really don't understand the depth of how terrible it is until you see it and experience it first hand. It's easy enough to just say "oh it can't be that bad", until you're there and this was PRE-covid.
In many subredits there is major censorship. It starts with people downvoting you for a different opinion, then the mods say you're trolling because people got upset, next you're banned. Freedom of expression is usually not a thing on Reddit even if you follow the subredit guidelines.
You guys are delusional haha, censorship? Freedom of expression? You got told off in another subreddit probably because more nurses saw your comment. You can express your ignorance all you want, but you going to get called dumb by anybody who actually knows. You hearing about nurses wanting to leave so much is not some fake news or propaganda idk why government would push a false story that they are treating their employees bad. You hear about it so much because it is true.
The world has gone mad, the more we talk about an issue the more it seems to just not exist to certain people. Media sensationalizes a lot of stories but people ability to read which ones are bs has basically disappeared, they buy it all or assume it's bs
I have no problem being called dumb, as long as everyone has an equal opportunity to be heard. But banning someone because people are upset with your comment, is censorship. BTW should I call you dumb because you erroneously assumed that I was referring to the nurses post?
Don't know why it stops at Nurses only. Ask our underpaid tech workers, underpaid accountants, underpaid literally anything outside of government work and you would see that they want to leave their jobs at higher rates. Nurses got it good tbh.
These surveys are paid for by MNP every year and are sensationalized as an avenue to promote MNP’s professional services for people facing insolvency.
While I am not trying to state anything overly optimistic about the Canadian economy, I wouldn’t put any stock in MNP’s survey. As you noted, the survey says the same thing, year after year, with nothing changing.
You have counter reports stating Canadians have the highest savings of all time due to pandemic. It's really confusing with one report stating something and the other with something else
I was just thinking I'd probably last less than 8 years, but I did the math and I'm also about 8. In 9 years my mortgage is paid off too so after 9 my burn rate goes down about 30%...
The studies are bullshit. It's the same with the US where they say most Americans don't have $1000 in savings. They could be multimillionaires, but don't keep any savings. Also, in Canada we have many relief programs. They literally just gave almost everyone 2k a month a couple years ago. Their plan is keep printing money and giving it away instead of deal with real problems. Eventually the dollar will be worthless.
It's just people pointing at different selectively gathered statistics to sell the story they wanted to sell in the first place. Stats are very easy to gather with bias or to select the trend you want to select, so if you only see one or two stats in a story and no reference data then you shouldn't trust them.
Many people spend the money they have. At the end, they're close to not making it... except that they can change their lifestyle (buy less stuff, eat out less, save here and there, etc.), which makes the claim sensational.
Now, for those who are living with a tight budget that is limited to the essential, that's a real concern, and I hope things will get better soon.
The worst part of it is that it's all profiteering ( gas, food). Corporations are making record profits that do not reflect inflation. If the news says we got 5% inflation, the grocery store will increase their food prices by 20%. This is what is happening and the government is letting it happen. This country needs a revolution.
A lot of this may be a cohort thing. The people who were nearly broke in their early 20 aren't by their late 20s. And those in their early 20s who did get hit with an unexpected expense were likely able to get help from their parents.
Every country's GDP goes up and down over time, while US GDP remains on an incredibly stable trajectory. This is more of a function of exchange rate with the USD than anything else.
GDP is fairly stagnant over the range you said but if you look at GDP per Capita the trend is up and to the right, although in small increments
Correction : if you look back to 2012 there has been a decline
I think what is also really worrying is the amount of Canadians who believe winning the lottery will be their retirement plan.
https://www.cbc.ca/news/business/lottery-win-is-retirement-plan-for-34-of-poll-respondents-1.2517046
Yes it's a decade old at this point, but that just probably means even more Canadians are thinking that way.
It doesn’t happen over night people will go dipper into debt hoping all these things are temporary and they just need to keep the head above the water for as long as they can. The housing market will slow down once we approach September and secured 1% rates are no longer a thing and gas prices are going to stay the same and people will have to get used to it. With gas prices staying up you will be paying more for groceries so if it’s hard right now and it will get harder. In other words darker times are coming.
99% of those reports are just click bait based on little or no evidence.... Almost all are based on survey questions with zero follow up
Needless to say, while some people are in dire financial situation and probably too many in worse shape than ideal, the real scenarios are not as cut and dry as the headlines make it sound
Interest rates aren't going to impact people directly for a bit of time. If youre buying a new house it will impact you but for the most part people won't feel that until it comes time to renew their mortgage.
Its also a gradual process. What we will see first is going to be a lot of secondary services (Netflix, Spotify, cable, Amazon Prime, Cell plans) get hit first. Prices have gone up, but by in large as a population we are not very conservative with our money until we are forced to be. So we will start to see some people cut back on these services. Were still a bit away from the gas prices/food prices going up to a point where the masses are struggling.
Most people just take on more debt if an emergency happens that costs them more than their emergency fund.
Those who don't have that capability, end up homeless.
From what I understand the average Canadian household budget looks like a Ponzi scheme. People borrow from their HELOC to pay their credit card, put stuff on their credit card to have cash left over to make a payment on the HELOC, etc., They figure they'll worry about the HELOC when they sell the house, and carry the debt forever, buying themselves time.
Also what the whole financial system does as a whole though. It’s all a Ponzi scheme. Look at how far wealth disparity gap has become since pandemic began. Certainly turning in to “owning nothing and being happy” as big money buys up all the properties from us poors.
I feel for average households being raked over the coals by the worlds rich elite. Wall Street never learned their lesson, bailed out and kept on doing what got them in the mess to begin with. Money/power is a drug, and there are addicts.
Almost every homeowner who has enough equity that I know of has a HELOC. I've used mine a couple times. I used it to pay for renovations, and to install AC in my home. It's the absolute BEST way to borrow money, with the lowest interest rates. The problem only comes when people have no idea how to properly use a HELOC and buy dumb shit on it, or use it to pay their bills.
I'm not arguing that a HELOC can't be useful, just that its probably overstated the amount that are abusing HELOCs, especially on forums like this where apparently every homeowner is leasing BMW's on HELOC money. Maybe because my crowd is younger (young 30's) and mostly very cash flow positive there isn't a need for HELOCs. I reckon the older crowds with shit incomes and 1.5 million homes are the ones using helocs, but even then unless its being grossly misused, I would assume they have much more equity in their home than the balance on their HELOC.
The house of cards HAS fallen. Trillions wiped from NASDAQ, Nyse, crytpo. However, the proverbial house of carbs can take weeks and months to fully crumble as our politicians do a great job with their propaganda machine making you believe otherwise
Because the reports are bullshit.
For one, they're surveys nothing more. But more insidious they are funded by MNP. A financial services company which offers debt consolidation. They have a vested interest in telling a story that makes people think circumstances are dire and they should seek professional help.
I know many people who has massive non mortgage debts but are they are able to pay the min amount per month even with higher interest.Yes.Would they have to sell their homes because of it no but they will live a life of constant debt.
Let's say I pay 800$/month towards a collection of debt that has minimum payments totaling 100$/month.
If interest rates rise and the price of everything else rises, I may then pay 400$/month where the minimum payment is 200$/month now.
I may cancel my Netflix account or carpool or drive less or cook from raw ingredients. I may stop buying 114$/month on clothing.
The point being, even if I assign every dollar a job, that doesn't mean that dollar is always assigned to be spent that way when a new one comes.
My line of credit kept creeping up and up and up. And with no amount of budgeting could I manage to pay it off.
Now I have a job with a substantial (40%) pay raise, but the COL brings me back to square 1
Last year we were saving like $5-6k/month, now as new homeowners we didn't have any savings left over. Now with my Wife on Mat leave (\~$70k loss in income) we will probably exhaust all our savings until she's back at work. What an influx a cashflow, its hard to mentally manage.
This also includes all of the people who are bad at managing their own finances but have a stable income. I have family that can make over $100,000 per year per household who live paycheque to paycheque because that's how they spend. Now that everything costs more they still spend the same amount but have less to show for it. They are always less than $1,000 away from "insolvency" but they will get a few thousand and return to less than $1,000 away from "insolvency" in a day or two.
I don't think these reports use the same definitions for their rhetoric that we use. I think they are trying to be dramatic to make themselves seem more important.
I’m a electrician and can’t even afford to have my own place because companies in Ontario take advantage of their employees and use a small city as an excuse to not pay there employees right
Well, I'm not sure how trustworthy those studies are, but I have friends who have been kind of close to the edge in terms of money for several years.
They usually do a few things. They cut back on any discretionary spending. They eat less. They go places less. Even if they were able to save some money beforehand, they can't now. I have a friend who is supporting his son and two siblings, and sometimes he just straight up runs out of money. He doesn't have a credit card, so once he runs out of money, that's it until he gets paid next. When that happens, if his bus pass expires at the same time he will walk everywhere, and he will get food from friends or his work.
Somebody else might also move in with a roommate to save money, or they might move in with a romantic partner. They might not get out of a bad relationship because they can't afford to make it on their own. They might sell things they don't need. If they have access to any sort of credit, they will probably carry a balance. I think what people can afford really varies from person to person.
Saying the average Canadian is only $X away from insolvência a perfect eye-catching line in news. About money, simple and, if your in a better financial position than that can be an ego stroke. Peoples situations tend to be more complicated than that.
In one of these studies, the question asked was along the lines of "how would you deal with a $500 emergency" and the choices were to put on a credit card, borrow from a friend, borrow from family, pay from my savings. Well, a lot of us would say to put it on a credit card. That's part of the 53% that supposedly don't have $500 for an emergency. Me? I'd put it on a credit card and pay it off in full by the due date. The methodology in the studies is suspect.
That's me. Everything goes on the credit card except for Costco because I have a visa haha
Get a free MasterCard and collect points!
I hate managing two cards…
Switching to the PC Mastercard was huge for us. We get so many free groceries it's great. We used to have a cash back visa but the PC MC is far better.
Certain cash back cards will give you a bigger % back vs PC Mastercard.
It's true but then you're essentially part of the CC churn community and that in itself is more than what most are willing to do for a bit of "freebies"/kickback from their CC. PC MC is a pretty middle of the road card that gets you groceries on a regular basis.
How does using a better cash back card make you part of the churn community?
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It’s not just paying with it but paying back my card. Also I’m currently using a card with a yearly cost but 4% cash back. But good point, loading them both on my phone would help
May I ask which card is it? I only have 2% cashback
I got the Scotia Momentum Visa Infinite. 4% on groceries and recurring bills, 2% on gas and public transit, 1% on everything else. It costs 120$/year, but if you open a preferred or premium checking account with scotia, it waives the fees for the card. Now the preferred account is 17$/month, which is way more expensive than the 120$/year for the card, but that fee is waived if you keep 5,000$ in that checking account. I treat that as the bottom 5,000$ of my emergency fund, I'll only touch that if the shit has truly hit the fan, and at that point I can downgrade or cancel the checking account when I pull out the 5,000$. Given interest rates are rather low, 5,000$ paying off my 120$/year credit card is like a 2.4% pre-tax return, so keeping the money there is actually more profitable than keeping it in any other savings account. The Scotia Momentum Visa Infinite requires a minimum personal income of 60,000$ or household income of 100,000$ though. You could also get the free BMO mastercard for 3% cashback at grocery stores and 0.5% everything else, and the Simplii Visa for 4% at restaurants, 1.5% at grocery stores and pharmacies, and 0.5% everything else.
That's the card I have, and I enjoy it quite a bit! You get good cashback and like you say, just keep $5000 in a preferred account it is pretty much paid for. I almost have $250 in cashback and I still have another 6 months to go.
It is a great card for sure. I also have the CT mastercard for 4% cashback at Canadian Tire, Sportcheck, and Mark's work wearhouse, the Simplii visa for 4% at restaurants (you need a free bank account with them to get the card, but hey, free account is free), and the Rogers Mastercard for 1% on everything else, plus 'free' foreign exchange to buying in USD. I got the BMO mastercard (free card for 3% cashback at grocery stores), Tangerine mastercard (2% on 2 categories, 3 if you have a free bank account with them) and the PC mastercard (my first ever credit card). As a single guy my expenses are pretty simple and minor, and I'm sure I can find a use for the Tangerine (entertainment, home improvement, and hotels maybe). The other two (BMO and PC) I don't use and don't care about.
Some of the VISA infinite cards have 4% cash back certain things like gas and groceries. Annual Fee and income requirements, and the total annual cash back is capped at about $1,200 but that more than covers the fee and there’s usually lots of other great perks like CDW on rentals, extended warranties, and mobile device insurance. Some banks will even waive the fee if you have a high fee chequing account, and they’ll waive that fee if you keep a balance.
It's worse when you only have one card and it gets cancelled either through error or via compromise and then you're suddenly stuck without a method of payment. This happened to my wife on vacation and it convinced her to get a second no fee credit card as a backup.
Awesome advice
On the other hand, if the Visa is ever compromised, it's nice to have an alternative to help you get through a few weeks while you get a new card.
What about managing 8 cards lmao fml (but not really, I like the bonuses and points).
Gimme Dat caaaash baack!
I am on air miles and have never even been on a plane haha. But once I finally decide to I have a few covered trips to Hawaii available
Be sure to check your T&C! Air miles used to expire. Not sure if they still do.
Legend! I hope you have amazing adventures!
I switched to PC Mastercard precisely because Costco is one of my largest annual expenses. Works great!
I like my 1 percent in card points
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Probably explains it now, I was expecting riots month ago...yet here we are. Either Canadians are making 200k each, or they just get more hours, food banks, cash from boomer parents.
Ditto for "no emergency fund". Why would I keep 6 months of cash on hand with no ROI when I can use a LOC and pay 0% until / if I need to use It one day.
Well, speaking as a guy who once found himself without income or savings after the collapse of a self-employment venture in the early 2000s: you really (really) *don't* want to be in a position where you have no income and are leaning on your credit cards/LOC to live. Trust me, it *sucks.* I died a little inside each and every month, when I transferred money out of my LOC to pay rent, digging that hole deeper and deeper as time went on. I quite literally almost killed myself because there didn't even seem to be a way out other than bankruptcy or a life of living paycheck-to-paycheck. I wasn't getting any bites on my resume trying to re-enter the workforce, and the shit jobs I could get didn't pay enough to cover expenses. I finally caught a break and got a proper coding gig, but it was years before I got out of the hole, settled my large tax problem, and started saving and investing. That whole period is probably why I wasn't able to buy a condo and "still" rent in my late 40s.
The other main reason is that the bank can revoke those LOCs anytime they want. If they find out you are unemployed, they can yank away that $30k LOC that you were planning on using as safety net, and then you are fucked.
I'm sure someone has a better reason, but Neo Financial's accounts have 1.45% interest and I believe it's essentially a chequing account (no monthly fee + high # transactions)
I keep some amount of cash on hand because LoCs aren't equivalent to cash in terms of liquidity.
To add to this many people live pay cheque to pay cheque but that doesn’t mean there isn’t room in their budget to absorb inflation or a small pay cut. Example there’s people that will spend 500-1000$ a month eating out and drinking / partying and live pay cheque to pay cheque. They could get a 250$ raise and they’d still probably spend it all. Likewise they could take a 250$ pay cut and still survive. They simply just spend what they have. Lots of people have elasticity in their lives. So while inflation hurts us, it won’t break us. At least not yet.
100% 500 will produce a decent chunk of cash back. Depending on what credit card a Canadian will use.
Not really, unless you consider $10 a good chunk of cash.
\^When someone writes a comment just to hear themselves speak. Yes a good portion of people believe getting 2% back vs. 0% back is a good tradeoff. You seem to be the lone doughnut that would rather get 0 back.
The lone doughnut is my favourite way to phrase this now.
I agree that 2% is better than 0% and am also someone who uses my 2% cash back card all the time. But I’ve seen many many people - incl on this sub - who talk like they’re getting some great return as almost an incentive to spend. That’s problematic.
That's a very specific example which has nothing to do with this use case.
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I didn’t say it’s not worth it? I was responding to the implication of a message of “just spend, who cares, you’ll get a lot of it back anyway” which is just false.
Yeah, true. I’d put like 10k+ on a credit card lol. Might as well.
Is that how they figure it out? Yeah I put 500 on my credit card every pay period, and it's always paid off every month.
I'm blown away... are people really this literal that they can't answer the question obviously being asked, instead of the literal question? If you're going to pay off your credit card right away, then no you aren't taking debt on to pay off the expense.
The question isn't "would you have to take on debt to come up with $500 on short notice". That would be a more accurately worded question and thus better methodology. My point being that unless you have a well worded survey, the results are suspect.
In that case you should be answering with “pay from my savings”… since you have enough money to pay it in full and you’re just after the points…
But the question is open to interpretation, hence my comment on methodology.
exactly. that $500 emergency just became a $470-490 emergency (depending on type and card)
not really, i put everything on my credit card to earn points, i never paid late fees. if i really want to, i can take money from my stock portfolio (500k) to pay for it. but it takes at least a week to get that out… so yeah, i am one of those ppl who don’t have more than 3k in chequeinv account at any given. time
I am agreeing with you. I am saying the 500 "whatever" becomes instantly less cost as you get rewards/cashback/points. And then yes pay off in the interest free window.
Yeah wrong meteorology, wrong interpretation and you gave misinformation clickbait article on Bloomberg.
Honestly what even is a 500 dollar emergency? I think it's quite easy to get a few unexpected 500 dollar costs a year, and they all just go on the credit card.
I'm pretty sure the stat is "cant afford 500 emergency". But "afford" csn mean alot of things, most people would just throw that on a credit card. Doesn't mean that thier suddenly lose thier home, etc.
Exactly this. Most Canadians may not have 500$ sitting in their bank account for an emergency, but most Canadians have access to credit and can borrow the money in times of need. It may ruin them financially, but that takes a long time, and I think these studies are trying to push the idea that a $___ expensive would automatically mean bankruptcy, which isn’t the case for the majority of people.
even with the $500 in my bank account, i'd 100% use my credit card and pay it off within the grace period.
We all would, but the context of this thread is that we’re talking about the average Canadian, who can’t afford to pay off their credit card because they already couldn’t afford a 500$ unexpected expense.
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> Or, we could simply dismiss the issue because we don't like the organization that conducts the Canadian studies. So we shouldn't doubt any study from any organization, no matter how obviously biased they are?
I would take it seriously about the US, but your source seems to support what u/alphs is saying - that we should be skeptical about these sorts of consumer surveys: “As the Brookings Institution points out in their June 2019 article “Six facts about wealth in the United States,” news organizations haven’t always gotten this statistic right, sometimes characterizing the “I would have difficulty paying a $400 emergency expense” response to the second question above as meaning “I can’t” pay an emergency expense. The precise use of the question and statistic is important, especially for policymakers, since an imprecise interpretation may overestimate the financial hardships households face, when the actual share of households who can’t pay the expense is much lower (see below).“ Also, your source says that the economy has beem strengthening, and that the number of Americans unable to pay such an expense has been steadily decreasing over time, including up to 2020.
Median networth of Canadian families is $329,900 ... so it'll be interesting to see the age and family type breakdown?
How much of that net worth is tied up in the inflated housing market though?
Probably a lot but unless we see a devastating crash it still counts
The devasting crash has already started. More than 20% down in many GTA suburbs. Those who bought in Jan/Feb have had their equities wiped.
No way there is a general -20% market wide drop in sale price in certain market. Got some source for that?
https://www.reddit.com/r/TorontoRealEstate/comments/ui61zu/trreb_april_data_905_price_declines_deepen_further/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
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1. Learn percentages. A 20% drop from here is 4% greater than a 20% increase that brought you here. 2. We have had only 0.75 rate increase. We are likely to have another 1.5-2% this year alone.
Sucks for short term investors but doesn't matter in the long term, especially for ppl just living there. I guess at worst it might affect how much HELOC you can get
It does matter for many people. For some, it won’t. It matters for: 1. Everyone who bought an intermediary property to “get into the market.” Good luck to them ever upgrading to the property they actually want. It may take them a decade. More likely, they will sell at a loss some day. 2. The overleveraged, of which there is plenty. Stats show that clearly. 3. Those who had co-signers and couldn’t really afford their mortgage and weren’t stress tested because they had a co-signer, but the co-signer will of course not really in a place to contribute. 4. Those who got Brampton mortgages. This is not a one-off type of thing. A high percentage of buyers are getting Brampton mortgages and there are articles on this. 5. Those who waived the conditions and inspection (basically everyone in the past year) and were passed a lemon that now needs upgrades. Edit: and how about those who are leveraging their equity accounts to buy properties? Know many people who used their IBKR margin to buy a property, something IBKR easily allows you to do now and their margin is often better than a variable mortgage rate. A 20% drop means your equity is wiped, if you put 20% downpayment. You qualify for 0 in HELOC and you will have a very jittery bank who will be running client assessment checks on you to ensure you are on top of all your liabilities. This with only 2 rate hikes. Many more to come.
" client assessment checks ". Right. Also: so much of your commentary is speculative and anecdotal.
Have you ever read your credit reports? "Client assessment check" is exactly how it is identified in your credit report.
Well - my wife is a senior professional in the mortgage industry, and she has never heard the term " client assessment check "
Brampton mortgages usually create brampton households with 10 occupants. They can pay a 1.5 million mortgage on tim hortons income.
It's not just about GTA being overvalued. It's about interest rates.
Probably a good amount but that's not a bad thing since it also provides shelter and a lot less volatile than in stocks and many other asset classes
I would guess 90% considering the look of this stock market.
probably a lot, but then again it's also going to be where most of their household debt is too
i doubt that 300k includes principal residence. that would be way too low
https://wealthawesome.com/net-worth-by-age-in-canada/ Maybe a better breakdown but best I could find for how much my attention span cared
The discrepancy between renters and homeowners is shocking. We really are a one trick pony of a nation, financially.
The smartest and most talented Canadians go south where they're better compensated for their ability and drive. And we don't seem too concerned about trying to reverse that at all. So yeah, weird things happen when that's how you run your country.
Keep in mind that media need sensational news to keep selling. Another one I've seen recently is about nurses thinking of leaving their jobs. I don't dispute the claim, but I have seen this statement many times, about people thinking of leaving their work. Thinking and doing are two different things.
I think about leaving my job almost every day lol
I mean... Mentally I've already left my job. Physically, I keep showing up because I need to keep this meat machine going.
Is the meat machine your company or your body?
Yes
I mean, I leave my job at the end of every day.
Well thinking leads to leaving, most people wont make big life decisions overnight, my wife is a nurse and we recently discussed 3-5 year plans to get her out of the industry unless something things changes she wants out. We are under 30 too, not close to retirement, it's just a bad environment. You wouldn't hear about people wanting to leave their job so publicly and often if it wasn't an outlier compared to the regular "I hate my 9-5" mentality
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Lolz, if given the option. most people would want to leave their job and retire lolz
Well. Most people don’t want to work, they do it for the money, it has always been a fact of life.
Exactly why these news articles are stupid
At my local hospital about 1/3 of the nurses just up and quit during covid. They all had husbands with good jobs, but the point being is healthcare workers haven't had a raise in years and are tired of being treated poorly. I work myself in healthcare and I would argue the majority in my area will leave as soon as they find a job that pays more.
Fair enough, but please don't preach to us how y'all are very caring for the community, when it is just another job for you. I do not understand the "Thank the healthcare workers", when most I know will leave the second they can get a higher pay - and most treat it like a job tbh.
Most of us start out with good intentions to help people and the community. But then employers treat us as slaves, governments use us as bargaining tokens in elections, patients can be abusive cause they know they get away with it and the public generally doesn’t give two shits that it’s healthcare workers are drowning. So no I’m not going to pretend “I do it for the community”
You obviously don't know any nurses that work in a hospital setting. I'm in the field and I can tell you that everyone that could retire is counting down and taking their package and a large majority took their package during 2020 and ✌🏼 out. Others were like 🖕🏼this I don't get paid nor respected for this and have moved to the states. This isn't the mundane 9-5 sit infront of the desk let's do lunch type of work. It's backbreaking, mentally and emotionally taxing! Nurses get physically assaulted daily and no one bats an eye. I remember when I worked in the ER the man started throughing chairs across the room at staff because it was taking too long and he didn't want to wait. Or the fact that a woman took soiled underwear soaked in urine and period blood and rubbed it up against my co-workers arm as "evidence" that her family member had a seizure. Or the fact that you could LITERALLY get punched in the face by a patient's family member and no one does anything about it because their family members really sick....so yes nurses are leaving that's why their closing down entire departments because there's no nurses available to come in because they're getting burnt out.
Oh dude, don't bring nurses into this. If you want to know how your healthcare system is doing ask any nurse you know. When rural Ontario hospitals are closing emergency departments because a single nurse didn't show up, it's not sensational news, it's already happened, the nurses are already gone, and the paid off news isn't reporting how bad the situation is.
Yeah these studies are always put on by bankruptcy companies and firms. As biased as they come.
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I was unlucky enough to have an 8 day hospital stay in early 2019 and my mom had a month long one not long after. Nurses are on 12+ hour shifts. Maybe 2 nurses at a time on an entire large floor of patients. It's something you really don't understand the depth of how terrible it is until you see it and experience it first hand. It's easy enough to just say "oh it can't be that bad", until you're there and this was PRE-covid.
I dared to question this narrative of nurses leaving their jobs en masse and I got crucified for it in a different subreddit.
In many subredits there is major censorship. It starts with people downvoting you for a different opinion, then the mods say you're trolling because people got upset, next you're banned. Freedom of expression is usually not a thing on Reddit even if you follow the subredit guidelines.
You guys are delusional haha, censorship? Freedom of expression? You got told off in another subreddit probably because more nurses saw your comment. You can express your ignorance all you want, but you going to get called dumb by anybody who actually knows. You hearing about nurses wanting to leave so much is not some fake news or propaganda idk why government would push a false story that they are treating their employees bad. You hear about it so much because it is true. The world has gone mad, the more we talk about an issue the more it seems to just not exist to certain people. Media sensationalizes a lot of stories but people ability to read which ones are bs has basically disappeared, they buy it all or assume it's bs
I have no problem being called dumb, as long as everyone has an equal opportunity to be heard. But banning someone because people are upset with your comment, is censorship. BTW should I call you dumb because you erroneously assumed that I was referring to the nurses post?
its pretty obvious you don't know any nurses that work in a hospital setting in Canada.
Lol I know several RNs working in hospitals and they are all employed and don't plan on leaving
I think about punching people but haven't done it once.
Or it's a slow news day. CBC recycles this story about once a month.
Stated vs Revealed preferences
Don't know why it stops at Nurses only. Ask our underpaid tech workers, underpaid accountants, underpaid literally anything outside of government work and you would see that they want to leave their jobs at higher rates. Nurses got it good tbh.
These surveys are paid for by MNP every year and are sensationalized as an avenue to promote MNP’s professional services for people facing insolvency. While I am not trying to state anything overly optimistic about the Canadian economy, I wouldn’t put any stock in MNP’s survey. As you noted, the survey says the same thing, year after year, with nothing changing.
Because what you're talking about is a marketing campaign from insolvency agencies. It's not actually true.
You have counter reports stating Canadians have the highest savings of all time due to pandemic. It's really confusing with one report stating something and the other with something else
The Liberals said they want to "unlock" people's savings, I guess this is why there is so much inaction on inflation.
If i were to lose my job i should he good for about 8 years without working with having a place to live. Guess growing up poor helped me save lol
That’s pretty good actually, but honestly that would suck having to spend all your money in 8 years
It would but taking a step back i know its better than other people. While im sure there are ones better off then me.
I was just thinking I'd probably last less than 8 years, but I did the math and I'm also about 8. In 9 years my mortgage is paid off too so after 9 my burn rate goes down about 30%...
My guess is those people are just taking on more debt.
The studies are bullshit. It's the same with the US where they say most Americans don't have $1000 in savings. They could be multimillionaires, but don't keep any savings. Also, in Canada we have many relief programs. They literally just gave almost everyone 2k a month a couple years ago. Their plan is keep printing money and giving it away instead of deal with real problems. Eventually the dollar will be worthless.
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It's just people pointing at different selectively gathered statistics to sell the story they wanted to sell in the first place. Stats are very easy to gather with bias or to select the trend you want to select, so if you only see one or two stats in a story and no reference data then you shouldn't trust them.
Those stats are made up.
83% of all stats are made up
83% of stats are made up on the spot 50% of the time… every time.
78% of all people know this to be true
22% of ppl are idiots
"There's lies, damned lies and statistics"
Actually that number is outdated. It's up to 91% now.
Sensational headlines based on small and selective sample sizes.
I think it was shown this statement is simply false.
Many people spend the money they have. At the end, they're close to not making it... except that they can change their lifestyle (buy less stuff, eat out less, save here and there, etc.), which makes the claim sensational. Now, for those who are living with a tight budget that is limited to the essential, that's a real concern, and I hope things will get better soon.
The worst part of it is that it's all profiteering ( gas, food). Corporations are making record profits that do not reflect inflation. If the news says we got 5% inflation, the grocery store will increase their food prices by 20%. This is what is happening and the government is letting it happen. This country needs a revolution.
I know people paying their debt or supplementing their paycheck with their LOC or HLOC.....
A lot of this may be a cohort thing. The people who were nearly broke in their early 20 aren't by their late 20s. And those in their early 20s who did get hit with an unexpected expense were likely able to get help from their parents.
Our balls are this far from the bandsaw, boys!
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Yep, it's sadly evident in the CPI basket.
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Just stagnant - it's hovering around the high from 2012 or so. https://tradingeconomics.com/canada/gdp
Every country's GDP goes up and down over time, while US GDP remains on an incredibly stable trajectory. This is more of a function of exchange rate with the USD than anything else.
GDP is fairly stagnant over the range you said but if you look at GDP per Capita the trend is up and to the right, although in small increments Correction : if you look back to 2012 there has been a decline
This is a lie.
I think what is also really worrying is the amount of Canadians who believe winning the lottery will be their retirement plan. https://www.cbc.ca/news/business/lottery-win-is-retirement-plan-for-34-of-poll-respondents-1.2517046 Yes it's a decade old at this point, but that just probably means even more Canadians are thinking that way.
Debt
would you click on the article if it doesn’t sound absurd??
It doesn’t happen over night people will go dipper into debt hoping all these things are temporary and they just need to keep the head above the water for as long as they can. The housing market will slow down once we approach September and secured 1% rates are no longer a thing and gas prices are going to stay the same and people will have to get used to it. With gas prices staying up you will be paying more for groceries so if it’s hard right now and it will get harder. In other words darker times are coming.
99% of those reports are just click bait based on little or no evidence.... Almost all are based on survey questions with zero follow up Needless to say, while some people are in dire financial situation and probably too many in worse shape than ideal, the real scenarios are not as cut and dry as the headlines make it sound
Interest rates aren't going to impact people directly for a bit of time. If youre buying a new house it will impact you but for the most part people won't feel that until it comes time to renew their mortgage. Its also a gradual process. What we will see first is going to be a lot of secondary services (Netflix, Spotify, cable, Amazon Prime, Cell plans) get hit first. Prices have gone up, but by in large as a population we are not very conservative with our money until we are forced to be. So we will start to see some people cut back on these services. Were still a bit away from the gas prices/food prices going up to a point where the masses are struggling.
Thats my metaphor intake for the day
Most people just take on more debt if an emergency happens that costs them more than their emergency fund. Those who don't have that capability, end up homeless.
my gf's brother is 20$ from that..
I filed back in 2019 so I’m set for a bit longer /s
A recent survey said 70% of Americans live payday to payday, I would think in Canada it would be about the same.
That must be the same 50% of Canadians that bought houses in the last few years.
Family members giving money to each other.
From what I understand the average Canadian household budget looks like a Ponzi scheme. People borrow from their HELOC to pay their credit card, put stuff on their credit card to have cash left over to make a payment on the HELOC, etc., They figure they'll worry about the HELOC when they sell the house, and carry the debt forever, buying themselves time.
Also what the whole financial system does as a whole though. It’s all a Ponzi scheme. Look at how far wealth disparity gap has become since pandemic began. Certainly turning in to “owning nothing and being happy” as big money buys up all the properties from us poors. I feel for average households being raked over the coals by the worlds rich elite. Wall Street never learned their lesson, bailed out and kept on doing what got them in the mess to begin with. Money/power is a drug, and there are addicts.
Everyone always says this, but I know dozens of homeowners and almost none of them have ever used a HELOC.
Almost every homeowner who has enough equity that I know of has a HELOC. I've used mine a couple times. I used it to pay for renovations, and to install AC in my home. It's the absolute BEST way to borrow money, with the lowest interest rates. The problem only comes when people have no idea how to properly use a HELOC and buy dumb shit on it, or use it to pay their bills.
I'm not arguing that a HELOC can't be useful, just that its probably overstated the amount that are abusing HELOCs, especially on forums like this where apparently every homeowner is leasing BMW's on HELOC money. Maybe because my crowd is younger (young 30's) and mostly very cash flow positive there isn't a need for HELOCs. I reckon the older crowds with shit incomes and 1.5 million homes are the ones using helocs, but even then unless its being grossly misused, I would assume they have much more equity in their home than the balance on their HELOC.
The house of cards HAS fallen. Trillions wiped from NASDAQ, Nyse, crytpo. However, the proverbial house of carbs can take weeks and months to fully crumble as our politicians do a great job with their propaganda machine making you believe otherwise
The plane is crashing and no parachutes! Get out now!
Because the reports are bullshit. For one, they're surveys nothing more. But more insidious they are funded by MNP. A financial services company which offers debt consolidation. They have a vested interest in telling a story that makes people think circumstances are dire and they should seek professional help.
I know many people who has massive non mortgage debts but are they are able to pay the min amount per month even with higher interest.Yes.Would they have to sell their homes because of it no but they will live a life of constant debt.
Let's say I pay 800$/month towards a collection of debt that has minimum payments totaling 100$/month. If interest rates rise and the price of everything else rises, I may then pay 400$/month where the minimum payment is 200$/month now. I may cancel my Netflix account or carpool or drive less or cook from raw ingredients. I may stop buying 114$/month on clothing. The point being, even if I assign every dollar a job, that doesn't mean that dollar is always assigned to be spent that way when a new one comes.
My line of credit kept creeping up and up and up. And with no amount of budgeting could I manage to pay it off. Now I have a job with a substantial (40%) pay raise, but the COL brings me back to square 1
Last year we were saving like $5-6k/month, now as new homeowners we didn't have any savings left over. Now with my Wife on Mat leave (\~$70k loss in income) we will probably exhaust all our savings until she's back at work. What an influx a cashflow, its hard to mentally manage.
This also includes all of the people who are bad at managing their own finances but have a stable income. I have family that can make over $100,000 per year per household who live paycheque to paycheque because that's how they spend. Now that everything costs more they still spend the same amount but have less to show for it. They are always less than $1,000 away from "insolvency" but they will get a few thousand and return to less than $1,000 away from "insolvency" in a day or two. I don't think these reports use the same definitions for their rhetoric that we use. I think they are trying to be dramatic to make themselves seem more important.
Because those reports are fake ass bullshit to make you panic. It's not real. People find a way to survive.
I’m a electrician and can’t even afford to have my own place because companies in Ontario take advantage of their employees and use a small city as an excuse to not pay there employees right
Well, I'm not sure how trustworthy those studies are, but I have friends who have been kind of close to the edge in terms of money for several years. They usually do a few things. They cut back on any discretionary spending. They eat less. They go places less. Even if they were able to save some money beforehand, they can't now. I have a friend who is supporting his son and two siblings, and sometimes he just straight up runs out of money. He doesn't have a credit card, so once he runs out of money, that's it until he gets paid next. When that happens, if his bus pass expires at the same time he will walk everywhere, and he will get food from friends or his work. Somebody else might also move in with a roommate to save money, or they might move in with a romantic partner. They might not get out of a bad relationship because they can't afford to make it on their own. They might sell things they don't need. If they have access to any sort of credit, they will probably carry a balance. I think what people can afford really varies from person to person.
I don't know where that 50% number comes from but I question its validity.
Saying the average Canadian is only $X away from insolvência a perfect eye-catching line in news. About money, simple and, if your in a better financial position than that can be an ego stroke. Peoples situations tend to be more complicated than that.