A new survey from ING Direct reveals that six in ten Canadians call themselves ‘savers’ despite one in two being unable to put away an extra $25 a week.
Despite fifty-nine per cent of Canadians labeling themselves ‘savers’ versus spenders when it comes to how they treat their money, a new survey from ING DIRECT released today reveals that one in two Canadians are unable to put away an extra $25 a week. Forty-one per cent say being able to save this relatively small amount per week would make them happier, and get them closer to reaching their most important financial goal this year – namely paying off debt (25%).
Eight months into 2011 – with economic conditions largely uncertain – average Canadians are finding it more challenging to save money than they did just a couple of years ago. Forty-six per cent of Canadians admit that saving money is more difficult today, and 31% admit they are nowhere near reaching their 2011 financial goals, although they are holding out hope that they will still achieve them.
“Mounting pressures have made saving difficult, yet a lot of average Canadians appear unwilling to commit to the small daily changes that help save a little money each week, and lead to greater financial well-being,” explained Peter Aceto, President and CEO, ING DIRECT.
“Just like eating healthy and exercising, changing some everyday habits can go a long way to getting people closer to longer-term, important savings goals, like paying down debt and saving for retirement. Instead of focusing on how to make big dents into debt repayment or radically changing a standard of living, think about cutting back some of the smaller daily spending, which is often unaccounted for and adds up significantly over the course of several months.”
When asked how they could save an extra $25 per week, those surveyed said they would cut back on small everyday expenses by eating out less (47%), doing less shopping (40%), making lunch and coffee at home (24%), using coupons (23%) and cutting down on groceries (23%).
The survey found that groceries are the biggest monthly expense for many Canadians (32%) aside from rent and mortgage payments. When asked how they would pay for an unexpected expense of more than $1,000, more than third (34%) of those surveyed said they would use their line of credit or credit card to cover it. Interestingly only 11% said they would dip into their emergency fund.
Thirty-six per cent of Canadians said that they don’t save any money on an annual basis, and half of Canadians (54%) indicated they live paycheque to paycheque.
The impact of $25 per week
Saving an extra $25 extra per week equals more than $1,300 per year, plus interest. Twenty-five dollars per week invested in the ING DIRECT high interest, no fee savings account, compounded over the last 10 years at an average rate of 2.53%, would have yielded close to $15,000 today.
“The point isn’t to cut out the daily indulgences that people enjoy, but to put a limit on them and find a healthy balance between spending and saving,” said Aceto. “Time and again, the feedback we get from Canadians is how quickly their savings add up over time absent of fees and with the power of compounding interest. We’re proud to have paid more than $5 billion in interest to Canadians, most whom have built up their saving accounts little by little over the years.”