According to a survey conducted by the Canadian Payroll Association, Canadians have poor saving practices and are prepared to work longer to make ends meet. This mirrors the common belief that the children of baby boomers will have a poorer standard of living than their parents, which is a reversal of past generational norms. Some interesting facts from the survey:
- 51% of employees are living paycheque to paycheque and would have difficulty meeting their financial obligations if their pay was delayed a single week.
- 50% of employees are saving less than 5% of their pay. 10% is the recommended amount to save.
- 79% of employees are expecting to work to at least 60 years of age.
- 39% of employees feel overwhelmed by their level of debt.
I find these numbers alarming, in particular as it relates to debt, as there is good debt and there is bad debt. Good debt should be embraced. An example of good debt is a mortgage: money borrowed to obtain an asset that increases in value. Most consumer debt is bad debt, such as a car loan. In this case you are purchasing an asset that depreciates in value. Canadians need to stop living beyond their means if accumulating consumer debt is the result. Live responsibly and worry less about your finances.
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