A new survey by Savvy New Canadians, a personal finance website with over 400,000 monthly visitors, reveals more than half of Canadians have a negative outlook when it comes to their personal finances, even though the majority changed their spending habits to curb debt accumulation.
One key survey finding is despite budgeting being one of the best ways a person can take charge of their money, alleviate debt, and save for the future, one-third (33%) of respondents don’t have one.
“Without a budget, Canadians risk overspending, accumulating debt, and even falling into financial hardship. Knowing exactly how your income is being allocated is the first step in setting yourself up for financial success. Even someone who has significant disposable income could be surprised to find out they’re spending a large chunk of it on dining out, so in this case, creating a budget could prompt them to divert half of that to retirement savings,” says Enoch Omololu, personal finance expert and founder of Savvy New Canadians.
When asked what their biggest financial concern is, 36% said they worry their investments will decline, while one-quarter (23%) worry they won’t have enough money saved for retirement.
Considering mounting inflation across the country, it’s not surprising that a hefty 54% of respondents said they have a negative outlook on their personal finances. Some of the sacrifices respondents said they had to make included cutting back on hobbies and entertainment to more grave ones, like having to drop out of post-secondary education or having to sell a house or car.
Omololu adds, “These larger cutbacks, where someone has to forgo an education, for example, may only affect a handful of respondents or so, but these decisions can have lasting impacts on individuals and families. Having to sacrifice furthering your education in order to keep your housing could easily result in this person becoming trapped in a paycheque to paycheque cycle, making it difficult for them to return to their studies.”
Perhaps the best takeaway from the survey: when asked what piece of financial advice had been the most beneficial, 41% of respondents selected ‘live within your means.’ A simple but sometimes difficult-to-follow bit of guidance in a highly commercialized world.
Other takeaways from the survey are:
Financial changes made in preparation for a possible recession: 33% of respondents updated their budget to reduce spending, 22% are looking for a better paying job, and 14% have taken or are looking for a second job or side hustle.
Financial cutbacks in the last year or two: 53% reduced spending on entertainment and dining out, 8% cut spending on extracurricular activities, and 24% have not made any changes.
What would help you the most with your current and future financial situation: 42% think having extra income to invest is the key to improving their finances, and 16% of respondents would consider moving to a less expensive area to better their financial situation.
The survey was conducted by Enoch Media Inc. and polled 652 Canadians aged 18+ between December 20, 2022, and January 16, 2023. Further details are shown in the infographic below.
