Work & Money

Canadians kinda suck at saving — but it's not too late for us to start

Twenty years from now, will the luxury coffees be worth it?
(Credit: iStock/Getty Images)

Face it. As much as you love treating yourself to that Everything Bagel and Large Caramel Macchiato on your way to work, it's probably not getting you closer to your financial goals. Worse still, and irony heavy, it's hard to treat yourself in the canned food (or cat food) aisle, which is where many Canadians end up shopping in their old age.

The days of working for 40 years and then getting the ol' gold watch and a healthy retirement package from our employers are far behind us. Few Canadians are disappearing into the haze of retirement to enjoy their golden years as well-heeled pensioners.

In fact, one study from ADP Canada reported that a staggering 77% of working Canadians would give leaving their employer a proper think if another employer offered them a comparable job with better retirement support. Employment is no longer the retirement lifeline it was for our parents or grandparents. Unsurprisingly, professional loyalty is dwindling, on both sides of the big desk.

On top of that, now that the onus is on us to feather our future beds, we're not so great at saving. Canadians spend about $1.65 for every dollar they earn, according to Marissa Sollows, senior education coordinator with the New Brunswick Financial and Consumer Services Commission. And we're getting worse. Sollows confirms, "the amount Canadians have been saving has been declining consistently in the last 30-plus years and our debt level is increasing." A lot of Canadians think their retirement money is coming in the form of a winning lottery ticket. In case the reminder is needed here: they've a better chance of being hit by lightning. Twice. Barring extreme luck or the passing of a wealthy, benevolent aunt who cherished you deeply, it's likely a good idea to save a little now.

The benefit of putting money into an RRSP is clear. If you put money in, you'll have more wealth when your most profitable earning years are behind you. Plus, you get a tax break in the immediate. For 2016, you could have put away up to 18% of your last year's earned income to a max of $25,370. Most Canadians don't come close to maxing out their RRSP contributions but you don't have to max out to improve your financial health.  Even a little can go along way. And you can catch up, even in your 50s, although it takes considerable discipline. Still, studies have shown that just educating yourself has a massive impact. One study saw a third of low-income earners over 50 had stopped spending more than they earned after a personal financial awareness course. And 35% had lowered their debt by tracking their money more closely. Getting informed matters.

Though our financial education system could do with an improvement, Canada is working on it. Each province is mandated with making Canadians financially literate, starting in elementary school and taking them through high school.

Plus, there are free financial aid apps like Mint making it easier to organize your spending habits by consolidating your financial info so you can assess your situation at a glance. Or apps that can help you save everytime you shop. GasBuddy lets you comparison shop for the best gas prices in your area. And cash back apps like Checkout51 let you earn money back on day-to-day purchases just by signing up with them. Coupon savings have gone digital.

Our willingness to be more frugal today often comes down to delayed gratification. How much do you want the bagel and the coffee right now? Enough to have to eat cat food later? It's an extreme example, but that's the point. Twenty years from now you'll likely wish you could trade all the luxury coffees and breakfast baked goods you've ever had to avoid living on cans of corned beef. Starting now can truly be a game changer. So, get informed and maybe give up one of those treats for your future self.

Simple limitations will let you have your macchiato and drink it too. Maybe every Friday is treat day, but the rest of the week you make brekkie and coffee at home. Yes, it means getting up 15 minutes earlier. But a lot of unnecessary spending comes from throwing money at a problem we've created ourselves. Like having enough time in the morning to prep meals at home for a fraction of the cost.

The easiest rule of saving to remember is pay yourself first. Have your financial institution set up automatic contributions into an RRSP every pay period. Not having to hem and haw about saving makes it easier. Or, if you're worried about accessing your money for expenses, try a TFSA which doesn't lock in your savings and lets you access cash tax free. Always start with a conservative amount then see if you can do more. There's no pretending that living on less is fun, but after about a month you'll adjust. And your savings will start to grow.

Living out your final years in extreme poverty shouldn't be the only deterrent. Leaving some resources aside so you can keep sipping the occasional macchiato is more to the point. So, depending on your devotion to carbs, or caffeine, analyze the necessity of those daily treats. And set up a manageable retirement saving plan today. Or keep buying Lotto 6/49 tickets.

Marc Beaulieu is a writer, producer and host of the live Q&A show guyQ LIVE @AskMen.