Annual poll reveals Canadians are focused on dealing with their immediate financial needs - while important long term goals including retirement may be taking a back seat
TORONTO, Jan. 3, 2014 /CNW/ - A new poll from CIBC (TSX: CM) (NYSE: CM) by Harris/Decima finds that paying down debt remains the top priority for Canadians in 2014, the fourth year in a row that debt concerns have topped the list in the annual survey. The poll results also show that immediate financial concerns including managing day-to-day spending and paying the bills have become more important to Canadians in recent years at the expense of longer term goals like retirement planning.
Over the last four years of this CIBC poll, Canadians identified the following as their top financial priorities:
|Paying Down Debt||16%||17%||17%||14%|
|Managing Day-to-Day Spending / Budgeting||8%||8%||14%||12%|
|Paying Bills / Getting By||8%||7%||3%||--|
"For the fourth year in a row, Canadians have told us their top financial priority is paying down their debt as we enter a new year," said Christina Kramer, Executive Vice President, Retail Distribution and Channel Strategy, CIBC. "While the intent to reduce debt is clear we also know that some Canadians are not yet making the progress they want to on reducing their overall debt levels, which speaks to the importance of having a clear action plan in place to reach your goals in 2014."
The "Do-It-Yourself" approach to debt repayment may not be working for some Canadians
The poll findings also revealed that less than half (47 per cent) of Canadians surveyed said they had met with an advisor in the last year. As well, out of those surveyed only 6 per cent named debt management as a topic of a conversation they would have with an advisor. Ms. Kramer noted that while the intention to pay down debt remains strong, it can be challenging if you don't have a plan in place.
"Despite being top of mind for 2014, many Canadians don't think about sitting down with an advisor and having a conversation about how to reduce their debt," said Ms. Kramer. "Trying to do-it-yourself can work for some people, but most Canadians would benefit from taking a broader view of their finances with an advisor including looking at their debt, and then working out a realistic plan to start repaying that debt over time."
Short Term Goals Taking Priority
This year's poll results also show a continued trend towards short term financial goals and issues becoming more important to Canadians, while longer term goals including retirement planning have dropped in the rankings.
- For example, while retirement planning was named by 13 per cent of Canadians as their top financial priority entering 2011, it is now 7 per cent entering 2014.
- Conversely, "paying the bills" has grown steadily since 2011, and was named by 8 per cent of Canadians in this year's survey as their priority for the year ahead.
"Managing cash flow and expenses are immediate issues, but you also can't put off your retirement planning indefinitely," said Ms. Kramer. "The good news is that if you start early you can take small steps towards building your retirement savings while also focusing on your current financial needs."
Advice on Delivering on Financial Priorities
- Talk to an Advisor - Most Canadians don't think about making debt reduction the topic of a conversation with an advisor, but it can help you make progress on paying down debt by looking at your overall financial picture and putting realistic steps in place to reduce interest costs and accelerate debt repayment.
- Recognize that your finances are all connected - Making progress on one aspect of your financial goals can lead to an opportunity to improve in others, meaning you don't have to focus on just one priority at a time. For example, a reduction in debt can free up funds to go towards retirement savings, or to further accelerate debt reduction. Renewing your mortgage at a lower interest rate can generate an improvement in cash flow that can be used to start making RRSP contributions earlier in life which can grow over time.
- Don't lose sight of the longer term - While it is important to address immediate financial needs such as debt reduction, it is equally important to keep future goals such as retirement in sight. Even small contributions today can make it easier in future years to reach your retirement savings goals.
- Stick to your plan - Once you have a plan in place, stick to it. If you fall off track, get back to your plan as soon as possible and keep making progress towards your goal.
KEY POLL FINDINGS
Top Financial Priorities entering 2014, by region:
|Paying Down Debt||Building Savings||Managing Spending||Paying Bills /Getting By||Retirement Planning|
|Manitoba and Saskatchewan||16%||8%||9%||7%||6%|
Top Financial Priorities entering 2014, by age:
|Age Bracket||Paying Down Debt||Building Savings||Managing Spending||Paying Bills /Getting By||Retirement Planning|
Percentage of Canadians who named Paying Down Debt their top financial priority by age, 2014 vs. 2013:
Percentage of Canadians who have met with an advisor in the last year, by region:
|Manitoba and Saskatchewan||48%|
Percentage of Canadians who have met with an advisor in the last year, by age:
Each week, Harris/Decima interviews just over 1000 Canadians through teleVox, the company's national telephone omnibus survey. These results were gathered from a sample of 2,060 Canadians between October 25 and November 4, 2013. A sample of this size has a margin of error of +/-2.2%, 19 times out of 20.
CIBC is a leading North American financial institution with nearly 11 million personal banking and business clients. CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada, and has offices in the United States and around the world. You can find other news releases and information about CIBC in our Press Centre on our corporate website at www.cibc.com.