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When it comes to saving their pennies for a rainy day, Manitoba and Saskatchewan residents are the most likely in the country to have four months or more of living expenses tucked away (37% versus 30% nationally). But saving is no easy feat. The majority of Manitoba and Saskatchewan residents admit they find it challenging (40%) or a real struggle (33%) to save, according to the TD Canada Trust 2011 Report on Savings released today.
The report, which was developed by TD Canada Trust to understand Canadians’ habits, attitudes and knowledge on saving in the current economy, found Manitoba and Saskatchewan residents struggle to save because many use disposable income to service debts (38%) and one quarter (26%) admit they don’t have enough money to cover living expenses.
But it’s not all doom and gloom. According to the report, services like automatic savings programs are helping Canadians take back the reins on their finances. Canadians who are enrolled in an automatic savings program are more likely to have at least one to three months of living expenses saved, compared to those who don’t participate in an automatic savings program (75% versus 57%).
There are a variety of automatic savings programs, and increasingly, Canadians are taking advantage of them. For instance, a pre-authorized transfer allows people to regularly and automatically save a portion of their income (e.g. every pay cheque) without ever even seeing it, or presumably, missing it. Others automatically transfer a small preset amount into customers’ savings account with an access card transaction, like a debit purchase or an ATM withdrawal. Since its launch in May 2009, nearly 40,000 people in Manitoba and Saskatchewan are actively using the TD Canada Trust “Simply Save” program. Together, they have saved more than $17 million dollars through small transfers of up to $5 per transaction.
“Two years ago we were hearing from customers what a challenge it was to save,” says Carrie Russell, Senior Vice President, TD Canada Trust. “We launched the Simply Save program because it makes saving effortless. And a small shift in your everyday behaviour can lead to more meaningful changes. As the saying goes, take care of the pennies and the dollars will take care of themselves. If you’re having difficulty, start small and automate, which helps take the pain out of saving.”
“We’re proud of our customers in Manitoba and Saskatchewan for saving a total of more than $17 million dollars in two years, ” says Russell. “For an average family, the amount saved through the program could cover an unexpected car repair, hockey equipment for the kids, or a weekend out of town for parents. We encourage our customers and all Canadians to challenge themselves go further. The reality is that most Canadians need to put away significantly more than they currently do for their future.”
TOP SAVINGS GOALS:
Manitoba and Saskatchewan residents’ top savings goals are to save for retirement (71%), to pay off their credit card (63%), and to save for a major purchase (54%) or vacation (51%). To achieve their goals, 64% say they save a portion of their pay cheque every month, and 29% say they save more than 10% of their income.
“Aim to set aside 10% of your pre-tax income each month for emergencies, retirement and other savings. If you’re finding it hard to save, work up to it,” says Russell, “but don’t make the mistake of not saving at all just because you can’t reach that goal right away.”
EASE THE SQUEEZE:
The report found that some Manitoba and Saskatchewan residents who are feeling the savings squeeze are getting themselves further in debt through interest charges and late fees. One-in-ten can’t afford to pay all of their bills every month (11%), only make minimum payment on their credit cards (10%), and have had to borrow money from family or friends (10%).
Paying bills late or missing payments altogether will damage your credit rating and make it difficult for you to borrow money in the future for a real emergency or opportunity.
“Pay bills online and set up automatic payments from your everyday bank account to ensure you’re never late. If you’re strapped for cash one month, then at least pay the minimum required,” says Russell. “If you’re finding yourself in over your head and unable to make your bill payments each month, then talk to your bank about possible ways to consolidate your debt and get help managing your money.”
FINANCIAL LITERACY IS IMPORTANT TO MANITOBA & SASKATCHEWAN RESIDENTS:
According to the report, 61% of Manitoba and Saskatchewan residents admit they are not very knowledgeable about saving, and many are interested in receiving professional advice on how to save money (54%), reduce their debt (46%) and create a budget (42%).
“A basic knowledge of financial literacy, like understanding how to follow a budget, ensure you have enough money to pay your bills, and put aside money into savings, is essential to secure a solid financial future,” says Russell.
About the TD Canada Trust 2011 Report on Savings
The TD Canada Trust 2011 Report on Savings polled a representative sample of 1,003 adult Canadians – including 83 Manitoba and Saskatchewan residents – through a custom, online survey. The survey was conducted by Environics Research between December 2-7, 2010.
About TD Canada Trust
TD Canada Trust offers personal and business banking to more than 11.5 million customers. We provide a wide range of products and services from chequing and savings accounts, to credit cards, mortgages and business banking, to credit protection and travel medical insurance, as well as advice on managing everyday finances. TD Canada Trust makes banking comfortable with award-winning service and convenience through 24/7 mobile, internet, telephone and ATM banking, as well as in over 1,100 branches – most open 8 ’til late and many now open Sunday. For more information, please visit: http://www.tdcanadatrust.com/. TD Canada Trust is the Canadian retail bank of TD Bank Group, the sixth largest bank in North America.
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