Five awesome lessons from CPA Canada for Financial Literacy Month
Surprisingly good news in CPA Canada's survey of Canadian spending, saving habits
TORONTO, November 2, 2018 – November is Financial Literacy Month and the Chartered Professional Accountants of Canada have just released a survey on the financial habits of Canadians. While the financial headlines warn of rising interest rates and the havoc they may wreak on household budgets, the 2018 CPA Canada Canadian Finance Study holds plenty of positive news.
Let’s start with the fact that most Canadians have cut back on day-to-day spending in the past five years. Perhaps we’ve taken the warnings of economists and accountants to heart because there’s also evidence of a whole lotta saving going on. Here are five awesome lessons from the study, which surveyed 2,042 randomly selected Canadian adults:
1. If you set a household budget, you’re likely to stick to it. Of the 58 per cent of Canadians who set a household budget, 84 per cent regularly stick to it. Twenty-five per cent said they always stick to their budget, while six out of 10 respondents say they usually stick to it. What’s awesome about that? Budgets are powerful tools that give you the ability the think further ahead.
2. Teaching kids about money helps them manage their money. Six out of 10 Canadians with kids say they have taught them about money in the last five years. Of those, 94 per cent had moderate to extreme success. Better still, 44% of parents with young children said their lessons were successful, while 48% of parents with adult children said the same. What’s awesome about that? Taking the time to teach your kids about money reaps dividends down the road.
3. Many Canadians are happy to work past 65. Of the 25 per cent of Canadians who plan to work past the traditional retirement age of 65, roughly half say they enjoy their job too much to retire, don’t want to spend all their time at home, or want to ease out of working. What’s awesome about that? Choose a job you love and you’ll never work a day in your life.
4. Saving money makes you feel better about the future. Three-quarters of Canadians contribute to their savings on a monthly basis. And three-quarters of Canadians expect to be better off financially next year. Coincidence? We don’t think so. Here’s a few other stats: 63 per cent have a savings account, 52 per cent have a TFSA, and 52 per cent of parents have money in an RESP. What’s awesome about that? Most Canadians are savers, not spenders.
5. Most Canadians are paying off their credit cards. For all the doom and gloom you hear about household debt in Canada, it may come as some surprise to learn that 72 per cent of Canadians say they won’t need to carry over a credit card balance next month. What’s awesome about that? Most Canadians should be able to bear the brunt of interest rate increases. For four out of 10 Canadians, however, a significant rate hike in mortgage and debt payment would be a challenge.
And here’s some more good news. Canadians are split in terms of how we view our overall personal financial skills. Forty-nine per cent of us rate our financial literact as "C" or less, with "A" being excellent and "F" as "needs improvement. Forty-eight per cent of us rate our knowledge as "A" or "B."
The cautious ones among us will be paying attention during Financial Literacy Month.
Read the 2018 CPA Canada Canadian Finance Study. Colin Ellis is the managing editor of Canadian Accountant.