Tips to better manage your finances: Poll finds getting out of debt still a top New Year’s resolution for Canadians
MONTREAL -- With the New Year just days away, Canadians are making it a priority to find a way to reduce their debt in 2020, according to an annual poll by CIBC.
It’s the 10th straight year the survey has found Canadians are thinking about their finances as they get ready to turn the page on a new year.
"Whether it is daily household items or unexpected events, expenses can fluctuate for reasons that are often outside of our control," said Jamie Golombek, managing director of CIBC financial planning and advice.
Though Canadians say they want to owe less money, they aren’t putting that same effort into building savings; 78 per cent of people say they find it more important to pay off their debt than put money aside.
"Debt repayment doesn't need to be worrisome. It needs to be managed, but it shouldn't come at the expense of savings,” Golombek insisted. “A strong financial plan incorporates debt management strategies, savings for financial goals and a balanced portfolio with investments designed to make money in all market conditions."
According to the poll, Canadians note they also want to find ways to better keep up with their bills, grow investments and save for vacation or retirement.
In addition, 71 per cent of respondents say they did hold back from borrowing more money in 2019.
However, that same percentage of people say they are concerned about the rising costs of household goods, while 55 per cent note they are worried about a potential recession in 2020.
Of the 28 per cent of Canadians who admitted to borrowing more money this year, they say they mostly did it to cover day-to-day costs (36 per cent), purchase a new vehicle (22 per cent) and pay for unexpected financial emergencies (15 per cent).
Canadians say they’re also feeling less optimistic about their financial situation as they head into 2020.
How to better manage your finances in 2020
- Take a deep-dive into your income and expenses: gain a clear picture of your financial situation, then find places where you can cut back and locate extra cash.
Golombek explains this will help you figure out where your highest interest payments are and adjust your monthly household costs to make smart financial decisions.
- Take control of your debt: meet with a financial advisor to understand what your options are when it comes to paying off your debt.
An advisor can help you save on interest costs, consolidate any payments and, if possible, find ways to lower fees or repay your debt faster.
- Plan for the expected – and the unexpected: Saving for unanticipated financial emergencies should be considered an expense, Golombek states.
One way to ensure you are still putting money aside while paying down your debt is to set up automatic withdrawals directly from your account.
The online survey was conducted from Dec. 6 to 8 with 1,515 respondents. The estimated margin of error is +/- 2.5%, 19 times out of 20.