Canadians taking household budget action, says CPA Canada finance study
Comprehensive 2020 Canadian Finance Study part of Financial Literacy Month
TORONTO, Nov. 11, 2020 – As part of its financial literacy initiative, CPA Canada has released a new study, which shows great variations in how Canadians are coping and even succeeding during this unprecedented time. The 2020 Canadian Finance Study explores people's attitudes and feelings toward their personal finances. The results, which are being released during Financial Literacy Month in Canada, highlight the new financial realities that Canadians are experiencing during the fallout from COVID-19.
Overall, Canadians are feeling confident about their knowledge and skills regarding their personal finances. In total, 78 per cent of the survey respondents believe they can stick to a budget and 81 per cent feel they can successfully manage their debts.
"There's no doubt the COVID-19 pandemic has increased financial difficulties and concerns for many Canadians," says Doretta Thompson, CPA Canada's Financial Literacy Leader. "Providing financial literacy information is essential in these unsettled times as it can assist individuals and families in making smart decisions to successfully manage their financial wellbeing."
Savings & Retirement
The study found that in the past five years, almost half (49 per cent) of the respondents have modified their savings strategy. The research also shows that a significant number of those surveyed are serious about their savings planning, with 63 per cent holding a savings account, 60 per cent investing into a Tax Free Savings Account (TFSA), and 53 per cent contributing to a Registered Retirement Savings Plan or Retirement Savings Plan (RRSP/RSP).
Despite today's uncertainty, Canadians are continuing to plan for their futures. Nearly one in four of the pre-retired Canadians (24 per cent) are planning to retire in 25 years or later, with the same proportion working to retire sometime in the next 10 years.
According to their current plans, 40 per cent of respondents who plan to retire indicate they will work after the age of 65, even if it's just on a part-time basis, with 43 per cent of those planning to work past 65 indicating that it is because they cannot afford to retire. Sixty per cent of respondents have put money aside for retirement in the past five years and nearly half (46 per cent) have spoken to a financial advisor about their retirement savings.
Budgets and spending
Canadians continue to prioritize budgeting to stay on track for current and future goals. In the past five years, 61 per cent of respondents cut back on day-to-day spending, while about half of the participants (49 per cent) have developed a household budget. Many are successfully watching their spending habits, with the vast majority (86 per cent) of those with household budgets saying they usually or always stick to their budget.
"It's encouraging to see many Canadians taking action to stay afloat during the fiscal turmoil of today but also looking to the future," said Thompson. "Our country's challenge is to ensure every Canadian has the knowledge and means to be financially secure."
CPA Canada financial literacy program
Through initiatives such as the financial literacy program, CPA Canada continues to demonstrate that the top priorities of CPAs are protecting and acting in the public’s interest. The organization representing Canada’s chartered professional accountants has a national network of more than 210,000 members of whom more than 50 per cent would volunteer to further financial literacy education. CPAs are already active in their communities and have a long history of giving back. For more about CPA Canada’s financial literacy program, download this overview of the program, and access CPA Canada financial literacy resources.
Nielsen conducted the CPA Canada 2020 Canadian Finance Study via an online questionnaire, from September 4 to 16 2020, with 2,008 randomly selected Canadian adults, aged 18 years and over, who are members of their online panel. Access the background document online and the earlier Canadian Finance Study 2020 news release.
By Canadian Accountant staff with files from CPA Canada.