How to Safeguard Your Financial Well-Being Amidst a Rate Increase

For the first time in seven years, the Bank of Canada has raised interest rates, increasing its overnight lending rate to 0.75 per cent from 0.5 per cent. As a consumer, if you are in the stage of your life when you are past borrowing and are investing, this can be good news. But for the majority of Canadians, an interest rate hike means their loans and mortgages just got more expensive.

In MNP’s recent consumer debt sentiment survey, it was identified that 45 per cent of Canadians and 48 per cent of home owners are concerned about the impact rising interest rates will have on their finances. While the July 12 rate hike was only a .25 per cent increase, for many Canadians this could mean difficulty in paying their loans and the inability to save money for the future. In fact, in MNP’s survey, more than four in ten Canadians indicated they were $200 or less away from financial insolvency.

It is important not be become complacent with your financial situation and it takes both hard work and a strong financial partner to ensure your financial well-being is protected. Credit unions have a strong focus on ensuring financial well-being of members and we see a number of examples where credit unions are making a difference for their members by offering no-fee accounts or providing financial tips to help. In Saskatchewan, Conexus Credit Union is a great example of an organization making a difference in the financial well-being of members.

Speaking to their commitment to preserving the financial well-being of their members, Eric Dillion, CEO of Conexus Credit Union had this to say: “At Conexus, we have worked hard over the last few years to really think about what it means to be financially healthy and have built out our member experience to help our owners with the behaviours that drive financial wellness. For us, it is a big part of what it means to be a financial cooperative.”

While MNP’s debt survey was conducted with consumers, the same rings true of business owners. As the owner of a small business it can be challenging to deal with rising rates, especially in certain regions where the economy has slowed down. Better financial management and increased business acumen are ways to reduce the risk for business and programs such as the Conexus Business Accelerator and Meridian Business Academy are designed to help businesses grow and succeed, even in a higher interest rate environment.

I have had the privilege of facilitating a number of webinars covering the above programs, with a focus on cash management, financial fluency and planning for business financial well-being. It is amazing to see the engagement of participants and to get feedback from businesses after the webinars, to see how access to this complimentary training has built their knowledge.

“Our partnership with MNP to create the Conexus Business Accelerator has been so well received by our business members. They really appreciate us taking a genuine interest in helping their business thrive. We really see this program as a tangible way to show our member businesses how much we care about their success,” added Dillion.

As a consumer or business owner, while the news of the rate hike raises uncertainty, credit unions such as Conexus are committed to supporting you when it comes to preserving and increasing your financial well-being. And MNP continues to collaborate with credit unions to find a way to help individuals and businesses achieve their best.

To read the full MNP Consumer Debt Sentiment Survey, click here

Contact Annette Bester, National Leader Credit Unions, at 306.664.8327 or [email protected]