'Dirty debt secret' guides couple out of the red, others struggle to stay afloat

With Christmas around the corner, Matt Walker says he's terrified to once again have a credit card after four years without one.

Walker and his wife, Dioné, racked up approximately $40,000 in debt from travelling, getting married and having kids — all the while not adjusting their spending habits.

"You get to a point where all you're paying is just interest," he told Cross Country Checkup's Ian Hanomansing. "We had points where we took out a loan and tried to pay that off just to lower the interest rates. It was never enough to pay off. You have so much debt. It just kind of snowballed."

Statistics Canada says the average Canadian household had about $1.82 in credit market debt for every dollar of disposable income in the second quarter of 2022. That puts the country's debt-to-disposable income ratio at 182 per cent — the ratio peaked last year at 185 per cent. 

In an effort to beat down inflation, the Bank of Canada raised its benchmark interest rate in October by 50 basis points to 3.75 per cent. But even as inflation cools, food prices continue to rise, putting further stress on people's finances. 

The Medicine Hat, Alta., couple was able to eventually turn things around and have been debt free for about one year.

"My wife did a lot of financial research, and it was a lot to swallow. No credit cards, no lending, and we had $700 a month that we had to pay on a loan. Just to take away that parachute, having no credit to fall back on, it's so scary."

And when they did eventually clear that financial hurdle, Walker says it didn't feel real at first.

"It kind of forces you to be like a team. Open dialogue, trying to discuss where we're at and not have it be like a secret from your wife," he said. "It felt like having one person [be] part of your dirty debt secret."

Nora Beninger says finding a new partner with a shared financial approach was a major criteria after her first marriage ended.

The Ottawa, Ont., resident says she was with a "financially irresponsible" person who accumulated significant debt, making her feel as if she lost control of her life. 

"I just remember the constant fear that I would end up eating cat food in retirement," said Beninger.

As a refugee who came to Canada at a young age, her parents arrived with essentially nothing, she says. They were always very money conscious — a trait that was passed along to her.

Remarrying nine years ago, Beninger — a chartered professional accountant — says it was important to her to be with someone who had a similar attitude about money.