Most Canadians don’t know how much they spend on housing. Do you?

Credit Canada, a non-profit credit counselling organization, partnered with Harris Poll Canada to survey more than 1,500 Canadians about their housing costs, budgets, and financial awareness. We spoke with Credit Canada CEO Bruce Sellery about what the results reveal about how Canadians are managing one of their biggest household expenses.

68% of Canadians don’t know how much they spend on housing

One of the poll’s biggest findings was that two in three people (68%) don’t know how much of their monthly budget goes toward shelter costs. These include a mortgage, rent, condo fees, property taxes, and utilities.

What’s alarming about this statistic is what it suggests: people who aren’t aware of the details of their biggest expense aren’t confident when it comes to their finances. “Confidence is really important,” said Sellery. “And competence is a driver of confidence. Knowing your numbers with clarity is actually reassuring for some people.” 

He noted that it’s the not knowing the details that often stresses people out.

32% who know their housing numbers struggle with affordability

One-third of respondents could confidently estimate how much they spend on housing without checking a bill or paycheque, but their responses show that most people face affordability challenges. The Canada Mortgage and Housing Corporation (CMHC) defines unaffordability as spending 30% or more of your gross household income on housing.

Of the people who knew their housing costs, here’s what they reported:

• 74% of them spent 30% or more on housing
• 29% of them spent at least 50% on shelter costs
• 16% of them spent 60% or more on housing
  

We couldn’t help but wonder if the financial advice to spend less than 30% on housing is still useful, so we put that question to Sellery. “It’s not helpful,” he said. “Some rules aren’t helpful because they’re inaccurate. I think the springboard for people is: what does housing actually cost?”

As he went on to say, calculating your own percentage is just as important as determining what your priorities and tradeoffs are. For instance, you might not mind or struggle with putting 50% of your budget toward housing if it means you can live in a metro area you love and don’t have to pay for fuel and car maintenance.

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What the low percentage of respondents who knew their numbers and Sellery emphasizes is that people need to be aware of these trade-offs when it comes to paying for housing. 

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Additional affordability findings

Before we turn to actionable advice from Sellery, we want to stress that the poll revealed striking variations in affordability among people who knew their housing costs. It probably doesn’t come as a surprise to learn that Gen X is the most house-broke, with almost 24% of them spending at least 60% or more on housing. This is higher than any other generation.

Albertans spend the most of respondents in any province; 80% of Albertans spend 30% or more on housing compared to 74% of the rest of the country. More people in the province are also concerned about their finances (61%) than others throughout Canada (52%).

Women also reported more financial worries than men. 57% of women reported being concerned about housing costs compared with 48% of men. 

One of the more troubling details from the poll showed that lower-income households face disproportionately high housing expenses. 23% of households earning less than $50,000 per year spent 60% or more of their gross income on housing. This figure is almost 2.5 times the rate of households earning $100,000 or more.

What Canadians can do to manage housing costs

“We spend lots of money on things that are pretty practical, but home means so much more to people than that. It is a source of safety, belonging, community, and family. We need to acknowledge and validate that the feelings people have make all of this so much harder,” Sellery says. 

His first recommendation is to look at your own situation with self-awareness. What are the tradeoffs you’re willing to make to reduce your housing costs? Are there any non-negotiables? Think about what’s within your circle of control, especially when it comes to what you’re spending money on. It’s much harder or even impossible to control factors that are far outside your control, like mortgage rates.

Once you’re thinking about your circumstances, you can brainstorm change. Try to be as creative as you can when coming up with options to reduce financial strain. For example, you might rent out a room in your home to an international student or rent out a parking space you have that you don’t actually need. Do your adult children still live at home with you? You might ask them to contribute to rent.

If it’s been a while since you checked in with your finances or you’re struggling to make your rent or housing payments, you’re not alone. You might be faced with tough choices or trade-offs that you really don’t want to make. 

To help you decide, consider working with a non-profit credit counselling agency like Credit Canada or take advantage of educational tools like their Keys to Home Confidence program, which provides budget templates, videos, and guides for renters, homeowners, and people looking to buy their first home.

Read more about real estate:

• Should you sell your home to your children below market value?
• Rent or buy: When does homeownership actually make financial sense?
• Chexy launches Canada’s first mortgage rewards program
• Beyond home prices: What the new CMHC affordability index reveals about Canada

About Jessica Gibson

Jessica Gibson is a personal finance writer with over a decade of experience in online publishing. She enjoys helping readers make informed decisions about credit cards, insurance, and debt management.

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