Many Canadians aren’t just living paycheque to paycheque anymore — they’ve already spent some or most of their pay before it even arrives, says a survey out today.

The MNP quarterly barometer of Canadians’ household finances found that three in five respondents said at least half of their income is already committed to bills, debt payments and regular expenses before it arrives, a third said most of their paycheque is taken and 16 per cent said all of it has been spent.

“Many Canadians are not just living paycheque-to-paycheque, they are entering each pay period with much of that paycheque already spoken for,” says Grant Bazian, president of insolvency firm MNP LTD.

That means the next paycheque is not a reset point, but has already been assigned to bills, debt payments and regular expenses before it arrives, creating a “rolling shortfall” that leaves households vulnerable to unexpected costs, he said.

In this situation the warning signs may not always look like a missed payment or collection call, said Bazian. A household may appear to managing by cutting back or leaning on credit, all the while moving deeper into a financial hole.

The MNP Consumer Debt Index that measures Canadians’ attitudes toward their finances actually rose from last quarter, suggesting a modest improvement in sentiment, though confidence is still below historical levels.

But financial vulnerability remains, said MNP. Almost half of Canadians said they are $200 or less away from not being able to pay their bills, up three points from last quarter, with 28 per cent saying they don’t earn enough to cover their obligations.

These pressures are leading to another trend identified by the survey — “lifestyle shrinkflation.”

More Canadians are scaling back in areas of life they once considered important for social contact and quality of life. More than half are dining out and socializing less and 35 per cent said they are reducing family and personal expenses such as children’s activities and personal care. One in five are cutting back on hosting family and friends.

“Canadians are not just tightening their budgets. Many are shrinking parts of their lifestyle to keep up with the cost of essentials,” said Bazian.

“When people are cutting back on plans, using credit to maintain activities, or scaling back on the things that help them feel connected and supported, financial pressure can start to affect more than household balance sheets. It can weigh on overall quality of life and emotional well-being.”

The Bank of Canada decides on its interest rate this week, but Canadians can expect little relief there. Over 60 per cent of those surveyed in the MNP poll said they “desperately” needed rates to come down, but the central bank is widely expected to hold at 2.25 per cent.

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Canada’s job numbers Friday surprised to the “upside” as economists say, but the slightly upbeat reading is not expected to sway the Bank of Canada when it decides on interest rates this week.

The economy gained 18,200 positions in June, data showed Friday, above the consensus call of 10,000, while the unemployment rate ticked down to 6.5 per cent.

BMO Economics chief economist Douglas Porter said the numbers show Canada is churning out moderate job growth again after a weak start to the year, but with the country’s population falling it doesn’t take a lot of new jobs to pull down the unemployment rate.

“On balance, there’s not much here to tip the scales for the Bank of Canada, and we continue to see them on hold, both at next week’s decision and through the balance of this year,” he said.

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McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.

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Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff and Bloomberg.

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