53 per cent of Canadians fail to save money

Survey finds 53 per cent of Canadians fail to save money

Canadians fail to save money(TORONTO, ON)  — It’s no joke: Canadians could be doing a lot more to firm up their finances.  A recent report from Chartered Professional Accountants of Canada (CPA Canada) shows that many Canadians are not taking steps to safeguard themselves against economic uncertainty:

  • More than half (53 per cent) of non-retired households say they do not save on a regular basis
  • Only 60 per cent of households with debt say they pay off a portion of their debt regularly
  • Over half (51 per cent) say they don’t have an emergency fund (in addition to regular savings).

The laissez-faire approach to financial fitness seems to be out of synch with other findings within the report, which states that the majority (65 per cent) of all households said the level of their financial discipline was somewhat or very strong.  And only 16 per cent expect a negative change in their personal finances due to wider economic changes.

It may be a matter of perception,” says Kevin Dancey, president and CEO of CPA Canada. “Factors such as lower interest rates, cheaper gas and a strengthening U.S. economy may have some people thinking things are just fine. However, no matter what happens with the economy over the coming months, the lingering issue of high debt levels cannot be ignored.”

Canadians are indeed spending and borrowing at increasingly high rates.  TransUnion recently announced that non-mortgage household debt levels are rising – as of the fourth quarter of 2014, Canadians owed $21,428 in non-mortgage debt (+2.3% from Q4 2013).

Ignorance is bliss sometimes,” says Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada.  “By failing to take a hard look at their finances, people are getting further into debt and saving less – they’re playing the financial fool.”

Schwartz argues that a few simple steps will produce big results, and it starts with a budget.

There’s a misconception out there that budgets are restrictive,” says Schwartz.  “In fact, they’re the opposite.  They liberate you because you know exactly where your money is going and it will help you make wise choices on your way to financial freedom.”

Consolidated Credit offers the following tips to help Canadians get a grip on their finances:

Know what you’re spending – Check your bank and credit statements and find out exactly where your money is going. Many bank and credit card websites allow you to download this info as a simple spreadsheet.  This can be a shocking experience for a lot of people – the little things add up!

Make adjustments – You might have discovered some unwelcome surprises in your spending. Cut back where it makes sense – brew your own coffee, pack your own lunches, clip coupons.  You will probably find some easy and obvious ways to free up some cash.

Speed up debt repayment – If your renewed budget has yielded you some extra spending money, add it to your monthly credit card bills.  Making only minimum payments will seriously prolong your repayment period and result in excessive interest charges.  Use our credit card debt calculator and find out how much time and money you can save by adding just $25 or $50 more to your payments.

Build a cushion – Direct some of your money to a savings account.  Many banks offer an automated service so that you can pay yourself first with every pay cheque.  Start by aiming to save 5 per cent of your monthly income, and then try to increase it to 10 per cent.  Having a cushion will mean that you won’t have to rely on credit in the case of a sudden job loss or reduction in income.

Keep an eye on it – You have to stick to a budget in order for it to work.  But that doesn’t mean your budget is set in stone.  Re-evaluate your budget every month and make tweaks where necessary.  Use a mobile budgeting app to track your spending, and measure your success on-the-go.

Take an active role in your finances,” adds Schwartz.  “You need to control your money so that it doesn’t control you.”

 

About Consolidated Credit Counseling Services of Canada, Inc.: 
Consolidated Credit Counseling Services of Canada is a national non-profit credit counselling organization that teaches consumers about personal finance.

 

For more information or to request an interview with Jeffrey Schwartz, please contact:

Jacob MacDonald, Public Relations Coordinator, Consolidated Credit Counseling Services of Canada, Inc., T: 416-915-7283 ext.1041, C: 647-390-5253, F: 416-915-5200, E: jmacdonald@consolidatedcredit.ca

Press Inquiries

Shivani Karwal
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pr@consolidatedcredit.ca
1-800-656-4120 x 1055