The Majority of Canadians Prioritize Saving Over Paying Down Debt

A recent poll released by Edward Jones delivers timely, revealing insight into Canadians’ top financial priorities and how they feel they are progressing towards achieving their financial goals. According to the findings, three out of every four Canadians have prioritized saving (77%) over paying down debt (44%). The results come as household debt levels reached a record high of 178.5% in Q4 2018, according to Statistics Canada*.

Respondents who cited “saving” as their top priority identified the following specific financial goals as their motivation:

Retirement – 41%

Funds to spend on their lifestyle (vacation, clothes, accessories, etc.) – 37%

Future family or child’s education – 30%

Emergency fund – 26%

For those Canadians who prioritize eliminating debt, respondents were split, with paying down long-term debt (such as a mortgage, car, cottage, etc.) and short-term debt (credit cards, school, line of credit, etc.) as their top priority (29%). “When it comes to planning for the future, paying down debt is equally as important as saving,” said Patrick French, principal of solutions tools and consulting with Edward Jones. “A financial advisor can partner with you to develop saving and debt payment plans tailored to your lifestyle, so that you’re able to address both priorities and stay on track towards meeting your financial goals.”

How do Canadians grade themselves when it comes to reaching their financial goals?

When asked to reflect on how they have fared towards reaching their financial goals, most respondents believed they have underperformed (58%), with only 12% believing they have met their goals.

Looking closer at the demographic breakdown:

Those 55+ (52%) and making over $80,000 (46%) were more likely to consider themselves on track towards meeting their financial goals, along with those who are married and are university/college educated (41%) and are university/college educated. ).

With respect to retirement, those aged 45-54 (61%) and the most affluent (earning over $80,000 per year: 53%) were by a long lead the most likely to be saving for retirement.

Paying down long-term debt was found to become a larger priority as household incomes rise, which can be attributed to dual income households and growing families who spend on big life purchases such as a cottage, home or car.

Younger Canadians (18-34) were found to be looking towards the future and were found to be more focused on purchasing a new home (43%) than any other cohort.

“Achieving one’s financial goals is within reach so long as there is a clear plan for getting there based on a strong understanding of one’s financial situation,” added French. “Regardless of age and income, a financial advisor can work with you to help understand what’s important to you, develop realistic goals and create a personalized financial strategy to achieve your goals.”

An online survey of 1522 Canadians was completed between Dec 14 and 17, 2018, using Leger’s online panel. The margin of error for this study was +/-2.5%, 19 times out of 20.

*Statistics Canada, “National balance sheet and financial flow accounts, fourth quarter 2018”, December 14, 2018.

 

Barbara A Armstrong
Financial Advisor, Edward Jones Investments
P:  250 384 8722
TF:  1 877 342 3280
Barbara.Armstrong@edwardjones.co