Yesterday, RateHub’s second annual Digital Money Trends Report revealed how Canadians are using technology to manage their personal finances. We surveyed 1,000 Canadians for the report, and mixed in our own anonymous user data to find out what decisions people make when they have the best information available. The report covered mortgages, credit cards, and more. Here’s what we learned about saving and investing:
People are not neglecting their savings accounts
If stories about people running up massive amounts of credit card debt have led you to believe savings accounts across the country are empty, here’s some good news for you: 87% of Canadians save at least some money each month! Almost seven-in-ten save 10% of their income (69%) and a whopping 23% of people are saving at least one-quarter of what they make. All that saved money could have been in the same bank account for a long time, however. Fifty-nine percent of boomers have had the same bank account for 20 years or more.
People are saving money before paying down debt
Of course we’re excited that 87% of Canadians are saving at least some money each month, but we also found 42% have at least some credit card debt. Most of those who do carry a balance are confident they’ll pay off the debt within three months. But there’s clearly enough overlap that there are people who are concurrently paying credit card interest rates (often over 20%), while saving money that might not earn much interest at all. The best savings accounts in Canada currently pay around 2.0% interest, although long-term savers can find higher returns by investing. That’s a big gap.
Canadians aren’t just saving for a rainy day
When we asked what people are saving for, our survey respondents told us overwhelmingly that retirement is one of their goals. But that’s not all. On average, Canadians have 1.6 different savings goals, while millennials are saving for an average of 1.9 different purposes. Millennials are most likely to be saving for an emergency fund (39%), down payment (37%) or major purchase (25%). Meanwhile generation Xers are the most likely to be saving for education (21%). Boomers were the most likely to say they don’t have a specific savings goal (19%) – perhaps because many have already retired. Outside of the six savings goals we asked about, travel/vacation was the most frequently mentioned.
People of all ages are iffy about retirement
In Canada, we love our registered retirement savings plans (RRSPs). We found that Canadians search Google for information about RRSPs about 137,000 times a month on average. When it comes to personal savings goals, more people are saving specifically for retirement than anything else. And it’s generation Xers (those aged 35-54) who are leading the charge, with 59% saving some money for their retirement every month. But people aren’t sure whether they’ll be able to save enough. Overall, only 45% of the people we surveyed are confident they’ll save enough money to retire. Confidence is the worst in the Atlantic provinces, where only 32% think they’ll be able to retire.
Find all of these stats and more in the 2016 Digital Money Trends report. In case you missed it, read our blog post on what we learned about mortgages, and check back tomorrow to read our roundup of what we learned about credit cards.