Apart from retirement, Canadians who responded to a survey about their savings strategies say they often have special goals, most likely a trip or emergency fund.
About 58 per cent of respondents in an online survey of 1,504 Canadian adults sponsored by CIBC said they were setting aside money outside of their retirement savings. Their goals:
- 25 per cent were saving for a trip.
- 17 per cent were saving for a rainy day.
- 14 per cent were saving for home renovations.
They chose those options more often than saving for a wedding, a car or for education.
And while 54 per cent of respondents said they set money aside regularly, only 14 per cent had funds withdrawn automatically from their account.
David Chilton, author of The Wealthy Barber and a personal finance expert, said he was surprised by how few people used payroll deductions or preauthorized chequing.
"It’s the one thing we know works. Get the money off the top of the paycheque before you have opportunity to blow it," he said.
Chilton said Canadians aren’t saving enough and aren’t applying the "pay yourself first" rule that is the most effective form of saving. (The rule states that instead of setting aside long-term savings from money that's left over after expenses, people should first pay money from their income into their savings accounts, and then use the remainder for spending.)
This bears out in our lagging retirement savings as well, Chilton said. The survey did not ask whether respondents had retirement savings plans as well.
Respondents to the CIBC survey were savvy about keeping their savings in a separate account, such as Tax Free Savings Account, where they would not be tempted to spend it. The survey found 61 per cent used a separate account for saving.
The survey was conducted May 2 and 3 by Vision Critical among 1,504 adults who are Angus Reid Forum panellists.