How Canadians are prioritizing their finances

Canadians are increasingly focusing on financial stability amid rising inflation and economic uncertainty, a recent poll reported.

Debt repayment and savings topped the list of priorities, according to the latest CIBC Financial Priorities poll.

It found that 13 per cent of respondents consider paying down debt as their top priority for the year, a goal equally shared with saving as much as possible. Keeping up with bills in 2024 is another major concern, according to 12 per cent of Canadians.

Inflation, affecting 61 per cent of the population, along with rising interest rates (28 per cent), are the primary financial concerns this year. Despite these challenges, the majority of Canadians (67 per cent) believe the country is either heading into or is already in a recession. However, a significant portion (64 per cent) feels financially prepared for unforeseen events, and 60 per cent are confident in their financial stability to endure a recession.

The overall sentiment towards personal finances has remained relatively stable compared to last year. Two-thirds (64 per cent) of Canadians feel positive about their current financial situation. About a quarter (26 per cent) have incurred more debt in the past 12 months.

“With the increasing pressure on household budgets due to higher costs, it’s understandable that debt reduction is a key focus for Canadians,” said Carissa Lucreziano, vice president of CIBC Financial Planning and Advice.

The CIBC poll also highlighted various reasons for increased debt, including the higher cost of living (46 per cent), daily expenses exceeding monthly income (38 per cent), unexpected financial emergencies (17 per cent), increased borrowing costs (14 per cent), and loss of income (10 per cent).

If given a windfall of $5,000, 36 per cent of Canadians would add it to their savings.

Furthermore, the poll indicates that 70 per cent of Canadians find it challenging to plan due to the current uncertain environment. Job security is also a concern, with 42 per cent of employed respondents worried about their employment stability in the current economic climate.