While the majority are saving for something other than retirement, few have a structured plan to save towards those goals
TORONTO, July 8, 2014 /CNW/ - A new CIBC (TSX: CM) (NYSE: CM) poll finds that almost 60 per cent of Canadians are currently saving up for something other than retirement. Top savings goals include trips, emergency funds and home renovations. While over half of savers say they put funds aside regularly, few Canadians are taking advantage of automatic withdrawals to ensure they meet their savings goals.
Key findings of the poll include:
- 58 per cent of Canadians are actively saving for something other than retirement right now
- 25 per cent of Canadians are currently saving for a trip
- 17 per cent are saving for a rainy day, or emergency fund
- 14 per cent are saving for home renovations
- While the majority (54 per cent) of Canadians saving for something other than retirement say they set money aside regularly, only 14 per cent have funds withdrawn automatically from their account or paycheque
- 61 per cent of those saving keep the funds in either a Tax Free Savings Account (TFSA) (32 per cent) or a chequing or savings account separate from their everyday account (29 per cent)
"Our CIBC poll shows that Canadians want to save but they don't always have a plan on how to achieve their specific savings goals," says Veni Iozzo, Senior Vice-President, Deposits & Client Solutions at CIBC. "Knowing what you're saving for and how much you need is a good first step, but having a financial plan to determine how much you can put aside and how often is important to help reach your goal faster."
Pay yourself first
Ms. Iozzo noted that despite it being common knowledge that setting up regular investment plans can provide some necessary discipline, most Canadians are trying to achieve their savings goals on their own. While more than half of those surveyed said they were actively setting aside money each month, only 14 per cent had set up an automatic withdrawal.
"If you really want to meet your savings goal, you need to commit to paying yourself first, by setting up automatic withdrawals," says Ms. Iozzo. "If you wait until the end of the month to see what is left over, there may not be anything to spare."
Have a dedicated savings account
Keeping savings separate from day-to-day spending is key. Having a separate account earmarked for savings makes it easier to watch your progress towards your goal and minimizes the likelihood that you will spend on something else.
According to the CIBC poll, nearly one-quarter (23 per cent) of Canadians who are saving are doing so in their regular everyday accounts.
"While it is great to have savings goals, the risk in keeping all your money in a single account makes it more likely that you may use the money for everyday living expenses and may not attain your specific savings goal," says Ms. Iozzo. "A TFSA is a good option for longer-term goals as you can save tax on any interest earned. For shorter-term goals, a separate account like the CIBC eAdvantage Savings Account can help you reach your goal faster."
Advice for focusing on saving
- Set up automatic withdrawals - Setting up a regular savings plan to withdraw smaller amounts regularly from your account will help you stay on track to reaching your goal.
- Use a separate account - Keeping your dedicated funds separate account from your everyday accounts helps you avoid the temptation to use that money to pay bills or day-to-day expenses.
- 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
Percentage of top savings goals for Canadians:
|An emergency/rainy day fund||17%|
|Down payment for a house||8%|
Percentage of Canadians actively saving for something other than retirement right now, by region:
From May 2nd to May 3rd 2014, Vision Critical conducted an online survey among 1,504 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 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 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]