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!
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.