IMAGINE HAVING ANOTHER $800.00 A MONTH IN YOUR BANK ACCOUNT
If you are an average Canadian, servicing an average amount of debt that is how much you spend each month on minimum monthly payments.
The average Canadian household is carrying about $29,000.00 in unsecured (credit card, loans and lines of credit) debt. Minimum monthly payments are usually in the range of 2.5% – 3% of the total outstanding balance. Therefore, if you are only making minimum monthly payments you will be paying between $725.00 and $870.00 per month to service that debt.
We might also assume that since you are spending so much to service debt that you will not be able to break free from the use of debt to meet living expenses so either you are holding the same or similar debt levels or your household debt is actually growing.
If you weren’t carry debt at that level you would have extra money that could be put away in some form of savings or used to fund other living expenses.