More Canadians say no debt is good debt
Steven Zussino is a member of the fast-growing debt-free club in Canada.
This Christmas, Zussino will be trading in turkey for Turkey. The Victoria, B.C. resident, along with his wife and baby daughter are preparing for a trip of a lifetime - a month in Europe cruising the Eastern Mediterranean and wandering Turkey and Portugal.
If that's not all, the trip will be almost entirely paid off before they ever step on the plane.
"Being debt free obviously helps," he says. "It doesn't make sense going on a holiday when you have plenty of debt to pay off."
Zussino, president of Grocery Alerts Canada, admits that having financial breathing room to pre-pay most of the trip helped make the decision to take an extravagant vacation easier. Four years ago he joined the ranks of Canada's debt free and he does what he can to maintain that status.
He's hardly the only member. According to RBC's 2nd annual debt poll, 26 per cent of Canadians say they have no personal, non-mortgage, debt this year compared to 22 per cent last year.
Some provinces fared better than others though. Thirty-six per cent of Albertans say they're debt free now - up from 22 per cent last year - while the number in Atlantic Canada has dropped from 17 per cent in 2011 to 14 per cent this year.
Patricia White, executive director of Credit Counselling Canada in Toronto, says she's encouraged to see the overall number rise, however.
"More people are understanding that it's important to pay down their debt. It's fabulous," she says.
Still, she cautions that debt is still a problem for many Canadians, pointing to another statistic in the RBC poll that shows indebted Canadians on average owe $13,141 in non-mortgage debt, up $84 from 2011. Only 4 in 10 say they're comfortable with their debt load while 34 per cent say it causes them anxiety.
"Even though we see more people who are debt free - which is excellent - we're seeing an increased amount of debt, too. Those people who have high debt levels are not in a good position," she says.
Both White and Zussino agree that, even if they're yet to pay down all their debt, Canadians are hearing the message that debt payment is important. Zussino points to popular television shows from CBC's "Dragon's Den" to "Til Debt Do Us Part," that help teach basic financial principles such as saving, investment and interest. Couple those lessons with the uncertainty of the recession, and more people are willing to put off purchasing expensive items or postponing trips until their debt level feels more reasonable.
For his part, Zussino says he's always been frugal, but attributes his debt-free status to a few tips: He and his wife save 30 per cent of their earnings, they track their spending and they shop smart. For instance, he and his wife use their MBNA Alaska Airlines MasterCard to rack up miles and inexpensive companion fares. Their upcoming flight to Turkey will cost the family of three only $400.
By staying on top of his saving and spending, he anticipates that 2013 will be another debt-free year.
"Life is stressful enough without worrying about debt," he says.
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