Almost half of all banked consumers in Canada are not managing their finances in a way that could help them meet their financial goals this year, a CIBC report stated. The online study, which surveyed Canadian adults in December 2016, found that 48% of participants were not planning to reduce their spending on non-necessary items to meet their financial targets of (1) controlling their debt, (2) keeping up with bill payments and (3) growing their investment. While respondents’ top financial priority is debt repayment, most of them stated their greatest worries to be around credit cards and lines of credit. Nearly 3 in 10 participants incurred a new debt within the last 12 months. The main driver behind overspending monthly income is the need to cover daily expenses.
This is also supported by RFi Group’s data from the Canadian Priority & Retail Banking Survey H2 2016, where 28% of Canadian banked adults state they are likely to spend less and 38% likely to borrow less over the next 12 months (scoring it a 1 or 2 on a 5-point scale). These proportions are significantly lower to the previous year’s data, where 31% and 47% of respondents stated that they were likely to spend and borrow less, respectively.
However, the CIBC results also demonstrated that 26% of Canadian respondents intend to take action by setting a household budget plan.