As the overall cost of living in Canada continues to reach new heights, over half (56 per cent) of Canadians are finding it challenging to discuss their financial issues with family and friends, according to BDO Debt Solutions’ Debt Stigma Survey. The new research is an extension of the firm’s annual Affordability Index and offers insight into the taboos surrounding debt while also exposing some of the anxieties Canadians are feeling about their money matters.
“Most people find it very difficult to talk about debt and the financial challenges they’re facing, let alone the strategies for overcoming debt,” says Nancy Snedden, National Leader of the BDO Debt Solutions practice. “As a result, a lot of people who are struggling feel lost and isolated, making their situation even more stressful.”
The online survey of over 1,500 Canadians, conducted by Léger, found that of those Canadians with no plans to discuss their debt, they cite fear of judgement and feeling ashamed or embarrassed (38 per cent), along with privacy concerns (35 per cent), fear of people thinking they are asking for money (31 per cent) and fear of burdening others (29 per cent) as top barriers. Fear of judgement is felt most strongly among Canadians ages 35-54 years old (44 per cent).
Overall, Canadians between the ages of 18-34 years old appear to be struggling the most. They are the most concerned about their current debt situation (64 per cent) compared to those 55+ (40 per cent). For this younger demographic, the challenge to talk about financial issues, including debt, stems from knowledge gaps and low financial literacy when it comes to debt management concepts for almost one-third of respondents (32 per cent).
Of those Canadians who admitted they are concerned about their debt (54 per cent), over half (58 per cent) prefer not to talk about it or don’t know what to do about their financial situation. This behaviour is higher among females (89 per cent), who find it more challenging than males (81 percent) to discuss concerns about their debt and ask for help. Females are also more likely to fear judgement and feel shame (40 percent v 36 per cent of men). For older Canadians (55+), the survey found that only 22 per cent of respondents are comfortable discussing their debt with their children.
Among those who find it most difficult to discuss financial matters:
- 86 per cent say it would be difficult to admit they can’t afford their grocery bill
- 85 per cent would have difficulty discussing with family or friends that they have too much debt and don’t know what to do about it, and ask for help
- 84 per cent of respondents would find it difficult to tell a family or friend that they can’t afford their rent or mortgage, and that they are overwhelmed by credit card debt
“The results of our BDO Debt Stigma Survey clearly affirm a sense of shame and embarrassment among those burdened with affordability challenges and debt,” adds Snedden. “At BDO, we always encourage those struggling with debt to talk to someone they can trust – a friend, a family member or a licensed professional like a Licensed Insolvency Trustee. Talking about debt becomes much easier when the conversation focusses less on shame and more on resources and solutions.”
Across different levels of financial health, social stigmas and financial literacy gaps are a significant roadblock when trying to navigate conversations around debt, living costs and overall financial difficulties. However, with the significant increase in cost of living, Canadians are showing signs that more transparency with family and friends about their financial matters is needed. In fact, despite the taboos surrounding debt and other financial challenges, the survey finds that most Canadians (89 per cent) say they would admit to family and friends that they wouldn’t be able to participate in a planned event if they couldn’t afford it.
Given the affordability crisis brought on by inflation, there is a greater need to discuss financial matters, but important taboos and prejudices continue to get in the way.