Poll finds half can't save for future amid financial pressures
A recent poll by the Angus Reid Institute reveals that 50% of Canadians under 55 face challenges in saving money, highlighting the financial pressures many are under.
According to Global News, Nathan Mitchell, a civil field technician, embodies this struggle, finding it difficult to save despite earning a decent income.
“Even as well as I do, I still can’t put anything away,” Mitchell said. He expresses a deep concern for his ability to provide for his children, drawing from his own experiences of financial hardship during childhood. “If I could never provide for my children, I don’t know if I could live with that personally,” he remarked, highlighting the emotional toll of his financial situation.
The survey also indicates that most Canadians under 55 would struggle with an unexpected expense exceeding $1,000.
Jason Childs, an economics professor at the University of Regina, comments that the findings are unsurprising, particularly for those aspiring to buy their first home. “People who don’t already own their homes outright are going to get squeezed through inflation,” Childs explained.
He observes that prioritizing immediate pleasures over future savings has become a more appealing choice for many.
Childs also notes that financial stress among younger Canadians is unprecedented, exacerbated by recent inflation and interest rate hikes. “Most of the people who are under 55 have no real previous experience with inflation about two or three percent, and suddenly we get hit by this and a rapidly rising interest rate,” he said.
Furthermore, he suggests that post-pandemic spending habits have continued to hinder savings efforts, with many maintaining a strong retail spending pattern as a form of self-reward. “Retail spending has held really strong over the last year or so,” Childs observed, indicating a “holdover from the ‘I deserve a treat’ mentality” prevalent during the pandemic.
The lack of savings not only affects individual financial stability but also poses potential strains on public income support programs like the Canadian Pension Plan.
“It’s going to be a real strain on programs like the Canadian Pension Plan, guaranteed annual income supports that seniors get,” Childs explained, highlighting the growing importance of such programs as savings dwindle.
To counter these savings challenges, Childs recommends setting up automatic deductions, no matter how small. “Set up automatic deductions for a small amount every week or every other week,” he advised. This strategy, according to Childs, can help individuals incrementally improve their financial situation amidst the ongoing economic pressures.
