Canadians are increasingly worried about inflation, and the majority are not optimistic about their household finances. These alarming findings come from the latest survey by credit monitoring agency TransUnion, which gauges consumer sentiment for the second quarter of 2024.

Financial Worries and Inflation

According to the survey, 58% of Canadians are concerned about their financial outlook for the next 12 months. Nearly half, or 46%, say their household financial situation is worse than expected this year, an increase of four percentage points from the same period last year.

Despite a 5.1% increase in wages in May according to Statistics Canada, 57% of respondents say their salary does not keep up with the current inflation rate of 2.9%.

Budget Adjustments

To ease their worries about the cost of living, 57% of Canadians have reduced their discretionary spending. About 1.3% are making only minimum payments on their credit cards, while those who reported paying off their debts faster increased by four percentage points from the first quarter.

Debt and Interest Rate Prospects

The prospect of lower interest rates is prompting 27% of Canadians to consider taking on more debt. Among them, 69% plan to apply for a new credit card or increase their credit limit, while others plan to refinance their mortgage (17%), obtain a new mortgage (15%), or take out a new home equity line of credit (11%).

These trends highlight growing concerns over inflation and personal finances, emphasizing the importance of financial management and budget adjustments for many Canadians.