Making ends meet as hard as ever: survey

Forget setting money aside — many workers are struggling to cover debt and expenses

Making ends meet as hard as ever: survey
There may be signals of a Canadian economic rally, but many employed adults probably don’t feel it.

In its ninth annual survey, the Canadian Payroll Association has revealed that working Canadians still face an uncertain financial outlook. Among all those surveyed, 47% reported that even a one-week delay in pay would make it hard for them to fulfil their financial obligations. The percentages were higher for millennials in their 30s (55% would have difficulty) and Gen-Xers in their 40s (51%).

"Half of Ontarians live pay cheque to pay cheque, further underscoring the need to spend less and save more every day, for emergencies and for retirement," said Janice MacLellan, the Canadian Payroll Association's vice president of operations

Forty-one per cent of employees across the country said their expenses equal or exceed their net pay. Nearly the same number of respondents (42%) said they save 5% or less of their earnings, and 22% said they could not put together $2,000 within a month for an emergency expense.

Ninety-four per cent of Canadians have debt, which includes mortgages (28%), credit cards (17%), car loans (18%), and lines of credit (17%). Because of the high cost of real estate in certain regions, the number of respondents that find mortgages on their primary residences the hardest to pay down has reached 32%. This makes mortgages the top debt concern, which previously in the survey’s history had always been credit cards; this year, only 23% tagged credit cards as their hardest debt problem.

Thirty-one per cent of all those polled reported that their debt load rose over the year. The survey suggests this is because of higher overall spending, mainly due to increased living expenses (32%) and unforeseen expenses (25%). When asked what they thought was the best way to financial well-being, 26% said they thought it was by earning more, while 19% replied that it was by spending less.

These increased expenses have darkened Canadians’ prospects for two major financial goals. When it comes to debt payments, 42% believed it would take more than 10 years to pay down their debts, while 12% said they would never be able to. As for their retirement prospects, 46% said they have to work longer now than they planned to five years ago, and 47% of respondents aged 50 and older have set aside less than a quarter of their planned nest egg.

For 46% of the working Canadians surveyed, $1 million is the amount they need to retire. The average Canadian is aiming to retire at around 61 years old.

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