Let’s talk about money

November is Financial Literacy Month in Canada. The theme of this year’s campaign is “Money on your Mind. Talk about it!”. So today, we’re talking about money! Although many people find it difficult to discuss financial matters, talking about money can help build financial confidence and lead to better financial outcomes.

Now, let’s count some of the data that we’ve got in our wallets.

What is the median after-tax income of Canadian families?

The median after-tax income of Canadian families and unattached individuals was $70,500 in 2022, a 3.4% decrease from $73,000 in 2021, adjusted for inflation.

The annual inflation rate in 2022 was 6.8%, which also contributed to the decline in median income from the previous year. Canada’s official poverty rate was 9.9% in 2022, increasing by 2.5 percentage points from 7.4% in 2021 and approaching the 2019 pre-COVID-19 pandemic rate of 10.3%.

How much do Canadian households spend on goods and services?

In 2021, on average, Canadian households spent $67,126 on goods and services. This included an average of $21,106 on shelter, $10,305 on food and $10,099 on transportation.

Canadian households spent more in 2021 than in 2019 on mortgages (+8.4%) and on the purchase of bicycles (+165.0%) and pets (+79.5%), and less on recreational services (-55.0%), air travel (-73.6%) and taxi services (-48.6%).

Meeting financial needs can be difficult

If you are finding it increasingly difficult to meet financial needs or are often concerned over finances, you are not alone.

In spring 2024, nearly half (45%) of Canadians reported that rising prices were greatly affecting their ability to meet day-to-day expenses, 12 percentage points higher than what it was two years earlier (33%).

Since 2021, price inflation of food has placed a financial strain on Canadians. In spring 2024, more than one in five Canadians (23%) reported their households as being very (8%) or somewhat (15%) likely to obtain food or meals from community organizations over the next six months.

Concerns about housing affordability have increased since the spring of 2022. In spring 2024, nearly 4 in 10 Canadians (38%) reported being very concerned with their ability to afford housing or rent because of rising housing prices, compared with 3 in 10 (30%) two years earlier.

Recent reports found that younger adults are struggling more financially than older Canadians. According to the most recent data, over half (55%) of people aged 25 to 44 years reported that rising prices were greatly affecting their ability to meet day-to-day expenses in spring 2024. By comparison, far fewer seniors (28%) reported having this difficulty.

Financial difficulty is known to influence overall well-being. Among those who described most days as quite a bit or very stressful due to financial issues in spring 2024, about one in five (17%) reported having high life satisfaction compared with nearly three-quarters (70%) of those who reported most days as being not at all or not very stressful.

Debt to disposable income ratio

The debt to disposable income ratio measures how much debt households have compared with their available income after taxes and other deductions. A higher ratio means households have more debt relative to their disposable income.

In the fourth quarter of 2023, Canadians held $1.75 of debt per dollar of disposable income, representing a decrease from $1.78 in the same quarter in the previous year.

For average Canadian households, mortgages constitute most of their debt. In the fourth quarter of 2023, an average homeowner with a mortgage held $3.06 of debt for every dollar of disposable income, representing a ratio nearly five times higher than a homeowner without a mortgage ($0.64).

Measuring inflation

The Consumer Price Index (CPI) is the official measure of inflation in Canada. It is representative of the change in prices experienced by the average Canadian household.

In September 2024, the CPI increased at the slowest pace in over three years. But the cumulative effect of increasing prices over that time—including a 40-year high in June 2022—has put dents in a lot of Canadians’ wallets. 

However, your personal experience of inflation may not perfectly match the Canadian average because of differences in your spending habits.

Check out Statistics Canada’s Personal Inflation Calculator, which accounts for those differences and provides a measure of inflation unique to you.

Financial tools for you

Finances can be difficult to navigate, so we’ve found some helpful tools and information that may come in handy:

• Find a budget planner, mortgage calculator, financial goal calculator and more on the Financial tools and calculators page.
• Find tools to help you manage your home finances by consulting the Housing costs on your mind? page.
• Visit the page Managing your money to find information on budgeting, banking, money transfers, insurance and planning your finances.