Finally I was able to balance my spending and started saving 15% of my income. But still, it wasn't so long ago that I was one paycheck away from financial trouble. According to the Canadian Payroll Association 48% of people in Ontario live paycheck to paycheck. When the Toronto housing bubble bursts that number will be even higher!
In today's blog post we will take an in depth look at the CPA survey findings. As usual, there are plenty of charts so read on.
Only 6% of Canadians are debt free. Not surprisingly the most common type of debt in Canada is a residential mortgage. The list below shows the percentage of various debt type possessed by Canadians according to the survey:
- Home Mortgage - 25%
- Credit Card Debt - 18%
- Car Loan - 18%
- Line of Credit - 17%
- No debt - 6%
- Student Loan - 4%
- Consumer Loan or Debt - 3%
- Family Debt - 3%
- Mortgage on business property - 3%
- Mortgage on Vacation property - 2%
- Business loan - 1%
Overall in Canada, 42% of people live paycheck to paycheck. This is actually an improvement from last year, when 48% of people were living paycheck to paycheck according to the CPA survey.
On the bright side, when respondents were asked whether they save more today than a year ago, the majority said yes.
45% of Canadians put 5% or less toward savings. The rest saves 6% or more. Nevertheless the national savings rate in Q2 of 2013 was 4%.
Now let's talk about retirement.
79% of Canadians believe that they need at least $500,000 to retire comfortably.
60% of Canadians have not saved more than a quarter of what they need for their retirement. 13% haven't started saving yet. Only 1% of respondents have enough money to retire comfortably.
You can view the original report by CPA here.