The holiday bills have already started coming in and many consumers are vowing not to overspend again. They are scrutinizing their finances and have made resolutions to pay down debt this year.  

A new survey from Equifax Canada indicates that 85% of those polled say they plan to make significant financial changes this year. The results of the survey, also reported in the Globe and Mail, found that 62% of respondents are concerned about growing debt levels.  Here are some other findings — where do you fit in?

  • Paying down debt – 38%
  • Saving more money – 37%
  • RRSPs, TSFAs or RESPs – 24%
  • Spending more on needs than wants – 23%

Despite growing concern Canadians are taking on too much household debt, an equal proportion of survey respondents said they consider themselves to be financially fit and follow a monthly household budget. Women are more apt to say they stick to a monthly household budget and Canadians aged 55 and over are the most likely to consider themselves financially fit.

45% of respondents said they knew their credit score. Of those surveyed, however, 25 % were less likely to check their credit score annually.

The media headlines in 2013 have warned of rising consumer debt loads. The average debt-to-income ratio hit a high of 163.4 % at the end of 2013. 

However the national credit trends report from Equifax found an improvement in consumer delinquencies, or non-payments and bankruptcies.  Maybe consumers have been listening to the warnings coming from the Minister of Finance.

If you’re concerned about your household debt load you might consider refinancing your current mortgage. In a refinance, the current mortgage is replaced with a new one with a higher balance in order to take advantage of the increased equity in the home. This is also referred to as debt consolidation. 

Since we are still experiencing historically low interest rates, a refinance to consolidate high interest loans and credit card debt may make sense.

Debt consolidation by refinancing your mortgage is quite common. Taking advantage of low interest rates can save a homeowner thousands of dollars in interest and can improve cash flow. All your creditors are paid off leaving you only with a mortgage payment.  

If this is an idea you’d like to explore, then it’s a good time for us to talk and go over your financial plans for 2014.