Half of Canadians say that they are staying home more often to manage their expenses
Higher costs and interest rates appear to be fuelling an “inflation isolation” phenomenon, with half of Canadians (51%) saying that they are staying home more often to manage their expenses, according to a recent survey conducted by Ipsos on behalf of MNP LTD.
Another 35% said that they are now spending less time socializing (35%) or with friends (30%) to reduce their spending. A significant portion reported feeling a sense of social isolation (20%) or loneliness (19%) because of higher interest rates and inflation.
More than two in five Canadians also said that current economic conditions have spurred increased stress (42%) and anxiety (39%) in their households.
“High inflation and interest rates are not just impacting Canadians’ finances, they are having a significant effect on their mental health as well,” said Grant Bazian, president of MNP LTD.
Respondents who rated their personal debt as “terrible” were significantly more likely to feel increased stress (77%) and anxiety (72%), and tend to stay home more often (72%) and spend less time socializing (55%) or with family (33%).
Younger Canadians and those who earn less than $40,000 were the most likely to spend reduced time socializing and with friends, the poll found.
#BreakingNews: Bank of Canada governor Tiff Macklem has said interest rates may be high enough to continue taming inflation in remarks that suggest the central bank could be at the end of its rate-hiking path.https://t.co/ItcymEjGWw#ratehikes #interestrates #inflation
— Canadian Mortgage Professional Magazine (@CMPmagazine) November 22, 2023
Households’ debt payments mounting
The survey further found that 34% of respondents have spent more in their monthly debt payments compared to a year ago, with 17% of Canadians paying more than $200 in additional debt payments.
“The pressure to manage increased costs of basic necessities and mounting debt is causing anxiety and stress,” Bazian said. “Canadians are retreating from social activities, forgoing time with friends and family to cut down on costs, illustrating the isolating impacts of inflation.”
Of the overburdened households, 46% said that they have lost hope of covering all of their living expenses in the next 12 months without incurring more debt.
Three in five Canadians (62%) have expressed concern about the impact of elevated interest rates on their financial situation, with 83% saying that they will be more careful about their spending due to interest rates.
