Sixty per cent of Canadians state that their current level of debt does not allow them to save as much as they would like, with 31 per cent of Canadians unable to save any money at all, a recent study by a group of Canadian credit unions has found.
The findings of the study have spurred a group of credit unions to call on their industry peers, banks and other financial institutions to do more to help Canadians and their families save and grow their money.
Seeing a need to address the culture of growing debt in Canada, Credit Union Atlantic in Nova Scotia, Innovation in Saskatchewan, and Coast Capital, Prospera and Sunshine Coast came together this year to begin strengthening financial literacy among Canadians, especially among youth.
The credit unions’ study looking at the financial behaviors of Canadians, finds that while more than 68 per cent of Canadians believe the income earners in their household exhibit good savings habits, this doesn’t necessarily mean that they can find ways to save each month. In fact, half of Canadians are unable to put money into a savings account each month and according to Statistics Canada the average Canadian household owes $1.63 for every dollar in disposable income earned.
Canadian parents recognize that instilling the value of savings at an early age is important with 86 per cent of parents wishing financial institutions would take a more pro-active role in educating youth in Canada about savings and debt. Overall, 73 per cent of Canadians agree financial institutions have a responsibility to help Canadians improve their financial future.
“Giving youth the opportunity to practice saving money is an important start to their financial literacy and the formation of good financial habits early-on,” said Shelley McDade, CEO at Sunshine Coast Credit Union. “With less than half of Canadian parents indicating that they speak with their kids about how to save and budget their money, we are committed to playing a role in providing our communities with resources that can support these conversations.”
The poll was carried out by Ispos Reid on behalf of a number of Canadian credit unions and interviewed 1,527 Canadian adults, including 431 parents, from coast-to-coast from March 19 to 26, 2014. The survey is considered accurate to within +/- 2.9 percentage points had all Canadian adults been polled and within +/- 5.4 percentage points had all Canadian parents been surveyed.
Other key findings:
* Over half (53 per cent) of Canadians say that savings and debt are equal financial priorities for their household, although more Canadians (27 per cent) prioritize reducing debt exclusively to increasing savings (20 per cent).
* Only four in 10 (40 per cent) Canadians set and follow a budget, and only 29 per cent discuss their finances with a financial advisor.
• 61 per cent of parents agree that they wish they had been instilled with the importance of savings at a younger age.
• 94 per cent of parents agree that if Canadian youth are taught about savings at an early age it will lead to better financial management practices in the future.
• Only 44 per cent of parents speak with their children about money, finances, budget and savings, with only 16 per cent involving their children in money management decisions. One in five (19 per cent) Canadians do none of these things.
• 67 per cent of parents state their child do not save any money each month.
