Canadians Fail To Save

From Advisor.ca Daily News

May 21, 2008
The majority of Canadians are failing to stash away any extra cash, despite the increasing risks of a long-predicted economic downturn, according to a new survey conducted for RBC.

Only 22% of respondents have increased the amount they are saving, while 20% said they were spending more. Only half of survey respondents said they had a "rainy day account," but even then there was often little in it — 55% said their account had about enough to cover one month's worth of expenses.

"One need only look at the newspapers or television to see that North America is in an economic downturn," said Ashif Ratanshi, senior vice-president, RBC branch investments and banking. "This is the time for Canadians to reassess their own finances and ensure they are effectively managing their money so that they can withstand any sudden pitfalls or changes in their lives."

Sixty-five percent of respondents said they relied on various credit facilities to support themselves in case of an emergency. About one million Canadians do manage to sustain a minimum balance of $1,000 in their bank accounts, but 60% of these people consider this paltry sum to be their "safety net."

It's little wonder that so many Canadians are failing to save, however. The survey found that 34% claimed they had nothing left over from their paycheque to save, after paying for food, housing and assorted household bills.

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