Unexpected expenses and insufficient earnings are the top reasons they fell off track
TORONTO, Nov. 13, 2014 /CNW/ - A new CIBC (TSX: CM) (NYSE: CM) poll finds that nearly one-third of Canadians (31 per cent) don't expect to meet the financial goals that they set for themselves at the start of the year. They will fail mainly because of unexpected costs, and from setting goals that may not be realistic based on their income or financial situation.
Key findings of the poll include:
- 31 per cent of Canadians who think they will not meet their financial goals by the end of the year cited these top reasons (for some, it was a combination of factors):
- Unexpected expenses (47 per cent)
- Did not earn enough money (41 per cent)
- A change in their financial situation (24 per cent)
- Couldn't stay the course (20 per cent)
- 30 per cent of Canadians have met some of their goals and plan to meet the rest by the end of the year
- 13 per cent of Canadians have met all of their financial goals for the year
- 22 per cent of Canadians did not set any goals for this year
"While it's encouraging to see so many Canadians setting financial goals for themselves, many will not succeed in meeting them," says Jeff Smith, Vice-President, Consumer Deposit Products at CIBC. "This is why it's so important to work with an advisor to set realistic goals based on your income, to have the discipline to stick to your plan, and to be prepared for the unexpected when life throws you a curveball."
A recent CIBC poll showed that nearly half (46 per cent) of Canadians dealt with a major unexpected event or emergency - like a house or car repair, medical costs or a job loss - in the past year that required most of them (74 per cent) either to borrow money or dip into their savings. "Planning to set up an emergency fund will help ensure that next year's goals aren't thrown off track," says Mr. Smith.
Keys to success
Few Canadians (13 per cent) succeeded in meeting their financial goals this year. The secrets to their success were primarily setting a budget and sticking to it (50 per cent) and taking the time to make a financial plan (31 per cent).
"The first and most important step is to make the time to discuss your financial goals, not just for the year but for the future, and determine with an advisor how you are going to get there," says Mr. Smith. "Setting a household budget can be helpful in earmarking funds for those goals that are most important to you, to ensure some money gets set aside for those priorities and not spent on your day-to-day expenses."
While almost a third (30 per cent) of Canadians have met some of their financial goals, they plan to meet most or all of them by the end of the year by buckling down and staying disciplined. Their top strategies include staying on track with their financial plan (45 per cent), sticking to their budget (43 per cent) and tightening their belt for the remainder of the year (22 per cent).
"With the holidays just around the corner, it can be a challenge to stick to your regular financial plan at this time of the year" says Mr. Smith. "But, by putting money aside towards your financial goals first before you set your holiday spending budget or start shopping, you have a better chance of staying on track with your plan."
Advice for delivering on your financial goals:
- Stick to the plan - Take some time to create a realistic plan for the year, and once you have it in place, stick to it. If you fall off track, get back to your plan as soon as possible to keep making progress towards your goals.
- Get advice - An advisor will look at your overall financial picture and priorities, and can help you set a budget and put a realistic plan in place to keep you focused on your goals.
- Pay yourself first - Set up a regular savings plan to withdraw smaller amounts automatically from your chequing account, to help you build up funds for your goals over time. Keeping the funds separate from your everyday account also helps you avoid the temptation to use that money to pay bills or other day-to-day expenses.
- Prepare for the unexpected - Financial advisors suggest that you set aside at least three months' worth of income saved for emergencies. Having an emergency fund available helps ensure your other financial goals aren't derailed by having to spend money on the unexpected.
KEY POLL FINDINGS
Percentage of Canadians who have met the personal financial goals they set for themselves at the beginning of the year:
|Don't think they will meet their goals by the end of the year||31%|
|Have met some of their goals so far, and plan to meet most/all by the end of the year||30%|
|Didn't set any goals this year||22%|
|Have met all their goals for the year||13%|
Among Canadians who don't think they will meet their goals this year, top reasons why they were unable to do so:
|Had unexpected expenses (e.g. illness, home repairs)||47%|
|Earnings were insufficient||41%|
|Financial situation changed||24%|
|Started as per plan, but unable to stay on course||20%|
From September 29th to 30th 2014, an online survey was conducted among 1,509 randomly selected Canadian adults who are Angus Reid Forum panelists. The margin of error—which measures sampling variability—is +/- 2.53%, 19 times out of 20. The results have been statistically weighted according to education, age, gender and region (and in Quebec language) Census data to ensure a sample representative of the entire adult population of Canada. Discrepancies in or between totals are due to rounding.
CIBC is a leading Canadian-based global financial institution with nearly 11 million personal banking and business clients. Through our three major business units - Retail and Business Banking, Wealth Management and Wholesale Banking - CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada with offices in the United States and around the world. You can find other news releases and information about CIBC in our Media Centre on our corporate website at www.cibc.com.
For further information:
Caroline Van Hasselt, Director, External Communications, 416-784-6699 or [email protected]