Your Finances with Stephen Maltby
While the majority are saving for something other than retirement, few have a structured plan to save towards those goals. These details are provided from CIBC.
A new CIBC poll finds that almost 60 per cent of Canadians are currently saving up for something other than retirement. Top savings goals include trips, emergency funds and home renovations. While over half of savers say they put funds aside regularly, few Canadians are taking advantage of automatic withdrawals to ensure they meet their savings goals.
Key findings of the poll include:
58 per cent of Canadians are actively saving for something other than retirement right now
25 per cent of Canadians are currently saving for a trip
17 per cent are saving for a rainy day, or emergency fund
14 per cent are saving for home renovations
While the majority (54 per cent) of Canadians saving for something other than retirement say they set money aside regularly, only 14 per cent have funds withdrawn automatically from their account or paycheque
61 per cent of those saving keep the funds in either a Tax Free Savings Account (TFSA) (32 per cent) or a chequing or savings account separate from their everyday account (29 per cent)
Despite it being common knowledge that setting up regular investment plans can provide some necessary discipline, most Canadians are trying to achieve their savings goals on their own. While more than half of those surveyed said they were actively setting aside money each month, only 14 per cent had set up an automatic withdrawal.
Keeping savings separate from day-to-day spending is key. Having a separate account earmarked for savings makes it easier to watch your progress towards your goal and minimizes the likelihood that you will spend on something else.
According to the CIBC poll, nearly one-quarter (23 per cent) of Canadians who are saving are doing so in their regular everyday accounts.
Advice for focusing on saving
Set up automatic withdrawals – Setting up a regular savings plan to withdraw smaller amounts regularly from your account will help you stay on track to reaching your goal.
Use a separate account – Keeping your dedicated funds separate account from your everyday accounts helps you avoid the temptation to use that money to pay bills or day-to-day expenses.
Stick to your plan – Once you have a plan in place, stick to it. If you fall off track, get back to your plan as soon as possible and keep making progress towards your goal.
Key Poll Findings
Percentage of top savings goals for Canadians:
An emergency/rainy day fund
Down payment for a house
Percentage of Canadians actively saving for something other than retirement right now, by region:
Disclosure note on poll: From May 2 to May 3 2014, Vision Critical conducted an online survey among 1,504 randomly selected Canadian adults who are Angus Reid Forum panelists. The margin of error—which measures sampling variability—is +/- 2.53%, 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.
Stephen Maltby is an Investment Adviser and Chartered Accountant with CIBC Wood Gundy. He has been in the financial services industry for more then 30 years and has held various accounting, investment and management positions with several accounting and investment firms over the years. He is in addition to his Advisor role a First Vice-President and Executive Director Atlantic Canada, CIBC Wood Gundy.