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Looking for a signal that things are getting back to normal as the pandemic recedes? Here’s a classic sign of normal life in Canada – debt levels are rising again.

Debt levels consistently grew in the years before the pandemic, then took a hiatus as the economy locked down. Now, debt growth is back. The credit reporting company Equifax Canada says total non-mortgage debt levels jumped 8.6 per cent in the first three months of the year compared to the same period of 2021. It was the first year-over-year quarterly increase since 2019.

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The average amount of non-mortgage consumer debt as of the end of March was $20,774. But evaluating debt levels is best done when looking at people of a similar age. Here are Equifax numbers on the average first-quarter debt levels by age group, with year-over-year comparisons:

Average Debt (Q1 2022)Average Debt Change Year-over-Year (Q1 2022 vs. Q1 2021)
18-25$8,129 -4.09%
26-35$16,832 2.83%
36-45$25,084 3.57%
46-55$31,442 2.82%
56-65$26,165 1.12%
65+$14,386 0.35%
Canada$20,744 1.54%

Young adults, hard hit in pandemic economic lockdowns, are still in debt-reduction mode. But all other age groups, even seniors, have started to increase debt again. This trend is happening as the Bank of Canada aggressively increases interest rates to cool inflation. Rising rates mean it’s not a good time to not borrow, but there’s a lot of pent-up demand to spend because of the pandemic.

How are borrowers bearing up? Delinquency rates – the proportion of debts where payments are more than 90 days past due – are still well below the levels of early 2021.

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But early signs of stress can be seen in rising delinquency rates for people below age 35. This group was also singled out by Equifax for the pace at which they’re increasing spending.

A goal for the second half of 2022 for all age groups: Get your non-mortgage levels below-average levels for your age group. Low debts mean less stress from rising rates.

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Rob’s personal finance reading list

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‘Everybody flaunts on social media’

Meet Gursahib Singh, a new Canadian who has a popular Youtube channel advising new immigrants not to make the same mistakes he made in getting into debt. He warns how social media can influence people to over-spend.

Ask Rob

Q: With interest rates rising and GICs becoming attractive, would you recommend a three-year ladder or go with a one-year term and wait and see?

A: I’m starting to wonder if we may be close to the interest rate peak for guaranteed investment certificates. Concern is mounting that rising rates will create an economic slowdown that causes rates to plateau and then decline. One year from now, rates could be lower. If that outlook is correct, then the three-year ladder makes sense. Locking in money for five years is also worth a thought.

Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.

Today’s financial tool

Struggling to find the GIC issuers with the best rates and arrange your purchases to stay within deposit insurance limits? Try a deposit broker – they specialize in helping conservative investors navigate the GIC market.

The Money-Free Zone

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Who I’m following on Twitter

Blogger Barry Choi, a go-to source on budget travel. Recent posts cover the cost of visiting Portugal and Scotland.

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