Canadians admit they could save on average $360 more each month and receive $2,280 in 'extra money' annually but lack the
discipline to save
TORONTO, Nov. 21, 2017 /CNW/ - The vast majority (85
per cent) of Canadians agree that they 'need to save more
money', but nearly two-thirds (64 per cent) are not making
savings a priority, finds a new CIBC (CM:TSX) (CM:NYSE)
poll. And, while most admit they could get by with less, few do,
and many say 'extra money' is for 'pleasure or enjoyment'.
"With consumer spending still strong and fueled by a long period
of record low interest rates, the study shows that very few
Canadians are making savings a priority, which is concerning as we
head into the holiday spending season," says David Nicholson, Vice-President, Imperial
Service, CIBC. "This is the time of year when many of us
make room in our budget for spending on gifts, Black Friday and
Cyber Monday sales and holiday parties, but don't think twice about
how little we've saved until regret kicks in with our New Year's resolutions."
Key poll findings:
- 85 per cent of Canadians agree that they 'need to save
more money'
- 64 per cent say they lack a detailed or regular savings
plan, including 26 per cent who 'don't really save' or
'never save' at all
- 82 per cent admit they could 'cut back' each month by on
average $360 'before feeling
the pinch'
- In addition to their regular income, nearly two-thirds (62
per cent) say they receive on average $2,280 in 'extra money' each year
- 79 per cent of those aged 35-54 worry about not having
enough money to retire when they want to
- 53 per cent of Canadians say they'd use credit or borrow
from friends and family if faced with unexpected $1,000 expense
- Top hurdles to saving are: not earning enough income (46 per
cent), getting derailed by unexpected expenses (29 per
cent), and struggling to pay everyday expenses (24 per
cent)
"People think it's too hard to save, but the truth is that we've
just become rusty at saving. It's about shifting your mindset, and
getting into the habit of saving regularly," says Mr. Nicholson.
"The hard part is exercising self-control over your spending so
that you can increase the amount you save over time."
No more excuses
A majority of Canadians (82 per cent) admit they could
spend, or get by with, less each month -- on average
$360 less -- before feeling
the pinch.
Further, almost two-thirds (62 per cent) receive 'extra
money' each year -- roughly $2,300 on average and as much as
$13,100 in the form of cash
gifts, employer bonuses, and tax refunds. But, less than half
(44 per cent) will save the surplus funds, and two
in five say the 'extra money is for pleasure or enjoyment.'
Among those who receive extra cash throughout the year, most
(66 per cent) use it to buy themselves gifts, pay everyday
expenses, or to chip away at consumer debt. Only two in five
(41 per cent) will put those extra funds aside for an
emergency, or to boost retirement savings.
With interest rates expected to edge higher and people living
longer in retirement, Canadians need to do more than simply spend
less, says Mr. Nicholson.
"The real question is, how can you afford not to save? Every day
that you delay starting a savings plan, the harder and more
expensive it gets to meet your goals later on in life," he says.
"The sooner you start a savings plan the sooner your money can be
put to work for you."
'Give to' yourself first
The poll findings show that simple saving habits work best, with
more than half (55 per cent) of Canadians agreeing they'd be
more likely to save if a set sum went automatically off their pay
and directly into a dedicated savings account.
"Paying yourself first is an easy and effective savings
strategy," says Mr. Nicholson. "For most people, it's actually
easier to start with a savings goal first, set an automatic savings
plan to meet that goal, and then, simply spend what's
leftover."
Having a budget and financial plan helps determine the right
savings amount based on each of your short- and long-term goals and
monthly cash flow. By setting up the withdrawal on payday, we
remove the temptation to spend those dollars, rather than trying to
overcome it, he adds.
Directing money into a Tax-Free Savings Account (TFSA) can give
an added boost to your savings since the interest or investment
income that's earned will be tax-free, helping your money grow
faster. Money in a TFSA can also be withdrawn without penalty and
used for multiple short- or long-term savings goals, such as to buy
a car, renovate your home, take a vacation, tap it for an
emergency, or save it for retirement.
"Before you get ready for the first big shopping weekend of the
season, think twice and put yourself at the top of the gift-giving
list," says Mr. Nicholson. "We automate our bill payments, why not
automate our savings? It can help you get through the upcoming
season confidently, and get your savings on track."
5 hacks for fail-proof savings:
- Get into a savings mindset
- Set a goal
- Decide how much you can cut back
- Make it automatic and frequent
- Keep spending and credit in check
KEY POLL FINDINGS:
How Canadians would describe their saving style:
|
All
Canadians
|
I have a detailed
savings plan and contribute routinely to meet my short and long
term goals
|
21 %
|
I pay myself first
with a set amount dedicated to savings, and then budget with the
remaining funds
|
15 %
|
I try to save
something each month, but the amount varies depending on what is
left over after spending
|
38 %
|
I don't really save –
any leftover cash 'goes in a jar'
|
13 %
|
I never
save
|
13 %
|
Amount Canadians say they could cut back (on spending or income)
each month before 'feeling the pinch':
|
All
Canadians
|
Male
|
Female
|
BC
|
AB
|
MB/SK
|
ON
|
QC
|
ATL
|
Mean/Average (excluding $0)
|
$360
|
$411
|
$311
|
$419
|
$442
|
$338
|
$354
|
$341
|
$250
|
$0
|
18 %
|
17 %
|
20 %
|
19 %
|
17 %
|
21 %
|
17 %
|
18 %
|
24 %
|
Less than
$100
|
21 %
|
18 %
|
23 %
|
13 %
|
21 %
|
23 %
|
21 %
|
22 %
|
27 %
|
$100-$249
|
23 %
|
21 %
|
26 %
|
23 %
|
15 %
|
21 %
|
26 %
|
24 %
|
25 %
|
$250-$499
|
18 %
|
19 %
|
17 %
|
22 %
|
20 %
|
16 %
|
16 %
|
19 %
|
17 %
|
$500-$999
|
11 %
|
14 %
|
8 %
|
13 %
|
14 %
|
12 %
|
11 %
|
10 %
|
4 %
|
$1000+
|
8 %
|
11 %
|
6 %
|
10 %
|
14 %
|
6 %
|
8 %
|
7 %
|
3 %
|
Top five obstacles to saving for Canadians, by age:
|
All
Canadians
|
I don't make enough
money
|
46 %
|
I often get derailed
by unexpected or emergency expenses (ex. Car or home repairs,
health expenses)
|
29 %
|
I struggle to pay
everyday bills (ex. Utilities, groceries)
|
24 %
|
Low interest
rates/low returns on savings
|
19 %
|
I spend too much
money on things I don't necessarily need
|
17 %
|
Average amounts Canadians receive annually in 'extra money'
(excluding regular income) among those who receive any of
the following sources:
|
All
Canadians
|
Bonus from
employer
|
$554
|
A
commission
|
$146
|
A tax
refund
|
$857
|
Cash for birthdays,
holidays or special occasions
|
$244
|
Other
|
$479
|
Total
|
$2,280
|
Average amounts Canadians receive annually in 'extra money'
(excluding regular income) among those who receive each of
the following sources:
|
Canadians who
receive
|
Bonus from
employer
|
$3,152
|
A
commission
|
$2,908
|
A tax
refund
|
$1,207
|
Cash for birthdays,
holidays or special occasions
|
$495
|
Other
|
$5,338
|
Total
|
$13,098
|
Top uses for 'extra money' among Canadians who receive
additional funds annually (excluding regular income):
|
All
Canadians
|
Spend on everyday
bills, consumer debt, gift for myself etc.
|
66 %
|
Save for short-term
spending towards vacation, vehicle, new home/renovation,
etc.
|
44%
|
Save for long-term
goals (emergency fund, children's education, retirement)
|
41 %
|
Other
|
6 %
|
I don't
know
|
6 %
|
About the CIBC Savings Poll:
From October 20th to October 21st,
2017 an online survey was conducted among 1,523 randomly
selected Canadian adults who are Angus Reid Forum panellists. The
margin of error—which measures sampling variability—is +/- 2.5%, 19
times out of 20. The results have been statistically weighted
according to education, age, gender and region (and in Quebec, language) Census data to ensure a
sample representative of the entire adult population of
Canada. Discrepancies in or
between totals are due to rounding.
About CIBC
CIBC is a leading Canadian-based global financial institution
with 11 million personal banking, business, public sector and
institutional clients. Across Personal and Small Business Banking,
Commercial Banking and Wealth Management, and Capital Markets
businesses, CIBC offers a full range of advice, solutions and
services through its leading digital banking network, and locations
across Canada, in the United States and around
the world. Ongoing news releases and more information about CIBC
can be found at www.cibc.com/ca/media-centre or by
following on LinkedIn (www.linkedin.com/company/cibc),
Twitter @CIBC, Facebook (www.facebook.com/CIBC) and
Instagram @CIBCNow.
SOURCE CIBC