November 3, 2016
A recent survey* by Tangerine found that only half of Canadians surveyed consider themselves knowledgeable when it comes to personal finances. Of the remaining half, 39 per cent consider their personal finance knowledge “satisfactory”, saying they only have enough knowledge to get by, and 12 per cent say they have limited or no knowledge.
Despite the need for greater personal finance knowledge, 79 per cent of Canadians surveyed say they have savings goals for the future. Top savings goals include saving for retirement (45 per cent), saving for an emergency fund (32 per cent) and saving for big vacation or travel (28 per cent).
To achieve these goals, 41 per cent say they set a budget and stick to it, while 51 per cent say they try and stay on budget, but sometimes lose track. Overall, 84 per cent reported that they live within their financial means. When asked what would prevent them from staying on budget or achieving their savings goals, 51 per cent of Canadians surveyed cited the rising cost of living and 36 per cent said last-minute or unplanned expenses.
“Financial Literacy Month is a great time to remind Canadians that there are many tools and resources out there to help them save more, spend less and meet their financial goals,” said Lucianna Adragna, Director of Deposit Products at Tangerine. “For example, Tangerine’s Forward Thinking blog has simple, helpful, and engaging content that provides practical information on all the financial milestones we encounter throughout our life.”
When it comes to young adults (aged 27-34), Tangerine’s survey found that 68 per cent are actively saving money using a savings account, RSP account or TFSA (Tax-Free Savings Account), and they are putting away $270 a month on average. Among the 32 per cent in this age bracket who do not actively save, they claim it’s because they have no money left after bills (43 per cent), are paying off student loans and/or credit (20 per cent) or have other priorities (17 per cent).
A quarter (24 per cent) of 27-34 year olds currently have student debt ranging from less than $5,000 to over $15,000, and almost six in 10 (57 per cent) of them are only able to pay the monthly minimum.
When it comes to money concerns for families (aged 35-54 with children under 18), over half (53 per cent) worry they’re not saving enough for their children’s post-secondary education, and even more (73 per cent) are concerned they’re not saving enough for retirement. Over half of Canadians surveyed in this group (54 per cent) are still paying down debts (mortgage, credit card, etc.) and feel this is preventing them from saving more.
These families are split on their approach to tackling savings and joint finances. While half (51 per cent) say their personal finances are completely joint, a significantly smaller percentage (18 per cent) keep their personal finances separate. About a third (31 per cent) use a mixed approach – some of their finances are joint and others are separate.
It’s fairly common for Canadian families to talk about money with their kids; seven in ten (70 per cent) talk to their children about personal finance and half (49 per cent) do it sometimes, depending on how relevant it is to their children.
For “Boomer” Canadians (aged 55-64), 42 per cent of those surveyed are already fully retired. Of the remaining 58 per cent who reported that they are still working either part-time or full-time, over half plan to retire in the next five years (53 per cent), a third expect to retire in six to 10 years (32 per cent), and 15 per cent plan to continue working for over 10 years.
The majority (75 per cent) feel prepared to manage their finances during retirement, either by working with a financial planner (44 per cent) or having a good knowledge of personal finance (31 per cent). Worryingly, a quarter (25 per cent) of Canadians surveyed nearing the retirement age don’t understand how their personal finances will work in retirement.
One lingering expense for this age group appears to be adult children. The majority (68 per cent) still provide financial support to their 18+ children who have graduated from high school. This help is most often in the form of money for monthly or recurring bills (35 per cent), help with grandchildren (32 per cent), help with education other than RESP savings (30 per cent), and sizeable monetary gifts (20 per cent). A quarter (26 per cent) of Canadians surveyed of pre-retirement age still have their adult children living with them.
During Financial Literacy Month, Tangerine is encouraging Canadians to talk about money and improve their financial fitness. Please see below for more information:
Personal Finance Bootcamp for Millennials – Tangerine is hosting an event taking place at Brainstation in downtown Toronto with personal finance expert Bridget Eastgaard from MoneyAfterGraduation.com and Joe Snyder from Tangerine Investments. At this event, attendees will hear tips on how to create a budget, get debt-free faster, save strategically and invest to make your money work for you. Please note attendees must register for this event.
Facebook® Live Q&A – Tangerine will be talking family finances with the SavvyMom® Group and personal finance expert Preet Banerjee. Tune into the social channels of SavvyMom and Tangerine for more info!
Boomer & Echo – Boomer & Echo is a mother and son blog that speaks to two generations about their path towards financial freedom. Stay tuned to this blog throughout Financial Literacy Month for tips and information on retirement finances.
Tangerine is a direct bank that delivers simplified everyday banking to Canadians. With 2 million Clients and close to $38 billion in total assets, we are Canada's leading direct bank. Tangerine offers banking that is flexible and accessible, products and services that are innovative, fair fees, and award-winning Client service. From no-fee daily chequing to high-interest savings accounts, GICs, RSPs, TFSAs, mortgages, a Credit Card, and mutual funds through its subsidiary, Tangerine Investment Funds Limited, Tangerine has the everyday banking products Canadians need. With over 1,000 employees in Canada, our presence extends beyond our website and Mobile Banking app to our Café locations, Pop-Up Locations, Kiosks and 24/7 Contact Centres. Tangerine was launched as ING DIRECT Canada in 1997. In 2012 it was acquired by Scotiabank, and operates independently as a wholly-owned subsidiary.
For more information, visit tangerine.ca.
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From October 14 to October 20, 2016 an online survey was conducted among randomly selected 1,434 Canadian adults who are Angus Reid Forum panelists. The sample included 1,014 national completes balanced by age, gender, region and education (and in Quebec language) according to the most recent Census data to ensure that this group is representative of the entire adult population of Canada. The margin of error for the national sample — which measures sampling variability — would be +/-3.1%, 19 times out of 20 on a probability sample of this size. Discrepancies in or between totals are due to rounding.
In addition to this representative group, there were also additional responses collected from specific groups of interest to allow reporting for these sub-groups: 27 to 34 year olds (n=417 in total), 35 to 54 year olds with children under 18 years living with them (n=249 in total), and 55 to 64 years old (n=261 in total).