CPA Canada study finds that most people think they know what to do to manage their finances, but the evidence suggests otherwise
Almost 8 in 10 Canadians are confident they have the knowledge and skills needed to make the right choices when it comes to saving, managing debt, investing and budgeting.
Unfortunately, the reality suggests that many of these people are kidding themselves, with some worrying behaviour and statistics around financial management.
CPA Canada’s Thriving or Surviving study found that 49% of Canadians have debt and roughly two thirds of those with debt are "concerned" about it.
The levels of Canadian household debt are a matter of record but most concerning from the study is that 45% of respondents have borrowed money in the last year and 61% of those that have borrowed in the last 2 years for day-to-day expenses have yet to pay it back.
Of those under 65 years old, three in five with a mortgage or other debts don’t believe they will pay it off by the time they reach 65.
While 54% of people said they have an emergency fund, half would not be able to come up with $2,500 if required urgently, 38% can't come up with $1,000 and 26% can't even come up with $500 without borrowing or selling something.
More than a quarter of respondents feel their finances are worse now than a year ago, but 34% believe they will be better off in a year from now.
More than three quarters (78%) of respondents think they would score 'A' 'B' or 'C' on their financial report cards and feel confident they have the knowledge and skills needed to make the right choices when it comes to saving, managing debt, investing and budgeting.
"There appears to be a disconnect between Canadians' financial behaviours and how confident they feel about their financial skills and knowledge," continued Thompson. "Most believe they have the knowledge to make the right decisions when it comes to personal finances, but some key indicators around the state of debt and savings point in a different direction."