Amid national economic headwinds, recent reports suggest that consumer debt and credit card spending is at an all-time high. The excessively high household debt is a key vulnerability of the Canadian economy, and consumers are fearful about their financial futures and their ability to save.
In collaboration with the Scotiabank Digital Banking Lab, the LNC presents a new policy brief: Breaking out of a Destructive Cycle of Debt. The brief, which includes a forward by LNC Advisory Council Chair Stephen Poloz, explores new research led by Ivey faculty Miranda Goode and June Cotte and their collaborators. Their work uncovers anticipated stigmatization--the feelings of judgement and shame about consumer debt being discovered--and establishes its link to debt concealment, increased spending, and negative well-being.
These findings provide a foundation for developing policy drivers to destigmatize debt in conjunction with existing policy on financial literacy education and other support programs. A three-pronged strategy to address public, institutional and self-stigma is proposed, which in combination with financial literacy programs, can be implemented to enhance consumer (financial) well-being.
