One in Four Canadians Resolve to Pay Down Debt in 2018

January 5, 2018

One in Four Canadians Resolve to Pay Down Debt in 2018

Annual CIBC survey results show that paying down debt remains the top financial priority for Canadians.

With another year come and gone, a new CIBC poll highlights the financial priorities of Canadians for 2018 and for the eighth year in a row, paying down debt or eliminating it altogether tops the list. At 25 per cent, debt repayment is the number one priority for Canadians, compared to 28 per cent last year. Although the focus to pay down debt year-over-year decreased somewhat, more Canadians this year are turning their attention to savings and growing their wealth.

According to the survey, 13 per cent of Canadians plan to focus on growing their investments (compared to 11 per cent last year); seven per cent have set their sights on saving for retirement; and, four per cent plan to concentrate on building up an emergency fund.

“While debt repayment is still the number one priority, Canadians recognize that it’s just as important to focus on building savings and growing your nest egg,” says Jennifer Hubbard, Managing Director, Financial Planning and Advice, CIBC. “Saving and managing your debt are both essential to your overall financial health.”

To succeed in juggling the two priorities—paying down debt and building up savings—CIBC offers the following tips:

  • Track your income and expenses. By knowing how much is coming in and going out, you’ll have a clear picture of your financial situation.
  • Tackle high-interest debt. Pay off any high-interest debt and/or consolidate your debts into one loan at a lower interest rate. Once the debt is paid, take that money and roll it into a savings vehicle.
  • Evaluate your spending. Differentiate between your needs and wants. Focus first on essentials, like housing, food, transportation, clothing, education, and health care. Once your essentials have been looked after, turn your attention to ways of staying within budget on your discretionary spending, such as entertainment, travel or dining out.
  • Automate your savings. Commit to saving even a small amount by setting up an automated transfer on the day you’re paid into a separate account. Consider as well, moving this money into a TFSA, RESP or RRSP to take advantage of any government grants and tax savings.
  • Seek expert help. Speak to an advisor to build out a budget and a financial plan that charts your short- and long-term goals. With a budget and plan in place, you’ll be better able to navigate your path to success.

In search of savings in your everyday expenses: 5 tips to put more money in your bank account

We here at ComparaSave.com are all about helping you get the most bang for your buck, on money that you’ll spend anyways. Take, for example, what you’re spending on auto insurance. This is one of those essential costs that falls under transportation that you need to include in your budget if you own a vehicle. What you don’t need however, is to overpay for it and there are ways you can spend less on your car insurance coverage:

  • Pay your premiums all at once. When you renew or get a new car insurance policy, opt to pay your premiums in one lump sum, rather than monthly. Many insurers charge a fee if you pay your premiums monthly, so if you can afford to pay your premiums in full, you’ll avoid these annoying extra charges.
  • Review your policy’s collision and comprehensive deductibles. For safe drivers with a clean and consistent driving record, this is a money-saving tip worth exploring because the higher your deductibles, the lower your premiums. For example, if your deductibles are set to $500, increasing them to $1000 could save you in the neighbourhood of five to 10 per cent. However, a word of caution first: only increase your deductibles to $1,000 if you’ve got the funds on hand. Paying a deductible—should you need to submit a claim—shouldn’t be financially stressful, so choose your deductibles prudently.
  • Talk to your auto insurer if you change your tires seasonally.Chances are you’ve already swapped out your all-season tires for winter wheels, but does your current insurer know you change your tires seasonally? If they don’t, you could be giving up a discount that can be as much as five per cent.
  • Bundle to save. Is your home insurance and car insurance through the same company? If not, you may be missing out on discounts in the range of five to 15 per cent off one, or even both of your policies. This discount isn’t just available to homeowners either; it’s available to tenants and condo residents too.
  • See how your current insurer’s rate compare. The biggest savings bang for your buck, will likely come from comparing car insurance quotes. See how your insurer’s rates compare by shopping around and getting quotes from our network of over 30 insurance companies. That’s 30 ways to potentially save money that can be better spent on helping you pay down your debt, or build up your nest egg. Compare auto insurance rates today for a better price.