Rising cost of living forces Ontarians to make tough sacrifices: More than a quarter are eating less to save, sharing expenses from housing to carpooling, childcare, and groceries
Nearly half say they are concerned about debt repayment (49%), even if interest rates decline, a five-point increase since last quarter.
TORONTO, ON – October 16, 2024 – Under the burden of high living costs, Ontarians are making difficult sacrifices and finding ways to share expenses to make ends meet. According to the latest MNP Consumer Debt Index, conducted quarterly by Ipsos, a quarter (26%) of Ontarians have turned to bill-splitting strategies such as carpooling, buying in bulk, sharing subscriptions and childcare, and living with others. More than one in 10 (12%) are saving money by moving in with friends, partners, or family members, or seeking out additional roommates or co-living spaces. Nearly three in 10 (28%) Ontarians say have even resorted to eating less to save money.
“We’re seeing a bill-splitting boom take hold as Ontarians adjust to the rising cost of living. Expense-sharing and co-living arrangements highlight the resourceful ways people are trying to cope with financial strain,” says Caryl Newbery-Mitchell, a Licensed Insolvency Trustee with MNP LTD in Toronto. “These approaches emphasize the tough situation many are in. What’s especially alarming is that nearly three in 10 have resorted to eating less just to get by.”
Ontarians are making other sacrifices to manage costs. Half (52%) say they’ve tried to save money by grocery shopping more strategically. Two in five say they’re avoiding impulse purchases (43%) or have stopped eating in restaurants or getting take-out (42%).
Cost-cutting measures and lower interest rates create breathing room in some household budgets
Perhaps in part due to prudent cost-cutting efforts and lower interest rates, Ontarians are reporting some improvements in their financial situation. Ontarians are building up the bank this quarter, reporting they have $1,047 (+$232) left over at the end of the month on average — the second-highest total amongst the provinces and the largest amount they’ve had after all expenses in the last five years. Just over two in five (43%, -2 pts) Ontarians say they’re $200 or less away each month from financial insolvency.
“Although falling interest rates and cost-saving measures have given Ontarians some wiggle room, a notable portion still find themselves close to insolvency, highlighting ongoing struggles with their finances,” says Newbery-Mitchell. “Even so, there are signs that financial pressures are easing, giving some individuals more breathing room to manage their debts and regain financial stability.”
Impact of interest rates on debt and financial outlook
With Ontarians expecting interest rates to continue falling over the next few years, perceptions of their ability to absorb interest rate increases have improved. A quarter (25%, +3 pts) say they’re much better equipped to manage an interest rate increase of one percentage point than they used to be. Nearly a third (32%, +1 pt) of Ontarians expect their debt situation to improve over the next year, while only about one in 10 believe it will worsen (13%, unchanged).
Following three interest rate cuts this year, almost half (49%, +5 pts) of Ontarians still say they’re concerned about their ability to repay their debt, even if interest rates decline. While slightly fewer say they will be in financial trouble if interest rates go up, more than half (52%, -2 pts) still indicate they would be in trouble.
“Despite inflation and interest rates both dropping, a significant number of Ontarians are still feeling the weight of their outstanding debts,” explains Newbery-Mitchell. “Cost-cutting alone may not offer enough relief for those who are struggling with a significant debt load. Reaching out to a Licensed Insolvency Trustee is an essential first step in taking back control of your finances. Bankruptcy is not the only solution; they can guide you through the full range of debt relief options.”
Licensed Insolvency Trustees provide unbiased advice on options including debt consolidation, debt management plans, budgeting, Consumer Proposals, and Bankruptcy. They are the only federally regulated debt professionals who are authorized to administer government-regulated insolvency solutions such as Bankruptcies and Consumer Proposals.
“Bill-splitting might provide some quick relief, but it often doesn’t tackle the core of debt issues. If you’re feeling burdened by bills and financial stress, a Licensed Insolvency Trustee can help you find long-term solutions to manage debt more effectively,” says Newbery-Mitchell.
MNP’s extensive network of Licensed Insolvency Trustees provides free consultations in over 200 offices nationwide, delivering local, personalized support to help individuals navigate their debt options.
Looking ahead to how Ontarians plan to cut costs or save money in the year to come, the survey revealed the following:
Ontarians' top money-saving strategies for the next 12 months
- Bill splitting – 25%
- Avoiding impulse purchases – 16%
- Moving in with family, friends, a partner, or roommates – 13%
- Creating a budget / recording all expenses – 13%
- Cancelling subscriptions – 13%
- Stopping eating in restaurants or getting takeout – 13%
- Grocery shopping strategically – 13%
- Going thrift shopping – 12%
- Moving somewhere more affordable – 12%
- Reducing utility consumption – 11%
- Finding free or low-cost entertainment – 11%
- Negotiating bills – 10%
- Cutting vices – 10%
- Splitting grocery costs / buying in bulk with roommates, friends, or family – 8%
About MNP LTD
MNP LTD, a division of the national accounting firm MNP LLP, is the largest insolvency practice in Canada. For more than 50 years, our experienced team of Licensed Insolvency Trustees and advisors have been working with individuals to help them recover from times of financial distress and regain control of their finances. With more than 240 offices from coast to coast, MNP helps thousands of Canadians each year who are struggling with an overwhelming amount of debt. Visit MNPdebt.ca to contact a Licensed Insolvency Trustee or use our free Do it Yourself (DIY) debt assessment tools. For regular, bite-sized insights about debt and personal finances, subscribe to the MNP 3-Minute Debt Break Podcast.
About the MNP Consumer Debt Index
The MNP Consumer Debt Index measures Canadians’ attitudes toward their consumer debt and gauges their ability to pay their bills, endure unexpected expenses, and absorb interest-rate fluctuations without approaching insolvency. Conducted by Ipsos and updated quarterly, the Index is an industry-leading barometer of financial pressure or relief among Canadians.
Now in its thirtieth wave, the Index has increased to 89 points, up four points since last quarter. Visit MNPdebt.ca/CDI to learn more.
The data was compiled by Ipsos on behalf of MNP LTD between September 6 and September 11, 2024. For this survey, a sample of 2,000 Canadians aged 18 years and over was interviewed. Weighting was then employed to balance demographics to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.5 percentage points, 19 times out of 20, had all Canadian adults been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to, coverage error and measurement error.
Caryl Newbery-Mitchell
Senior Vice-President
CIRP, LIT, MBA
