TORONTO, Sept. 30 /CNW/ - Canadians aged 18-to-34 say that they learned about saving money from their mom and dad (46%), yet they are not following their parents' example. Today, 19% of young Canadian adults say they are saving 10-25% of their total monthly income, compared to 29% of those 55 plus who say they saved that amount when they were the same age. This is according to the TD Canada Trust Generational Savings Study, which surveyed three groups of Canadians aged 18-to-34, 35-to-54 and 55 plus to better understand savings habits, attitudes and perceptions by different age groups.
Older Canadians feel there were fewer barriers to saving money when they started out. Whether true or not, perceptions have indeed changed - for young adults, not making enough money is cited as the top barrier to saving, whereas those 55 plus said that their daily expenses, the cost of living, were the biggest barrier to saving when they were the same age. Of young adults today, debt is a bigger barrier to saving for men than it is for women. Twenty-eight per cent of men aged 18-to-34 said debt was their biggest barrier to saving, compared to only 18% of women.
Most Canadians find it hard to save
Carrie Russell, Senior Vice President, Core Banking and Payments, TD Canada Trust, says that while the results are disappointing, they are not that surprising. "In an environment where many have seen their incomes reduced and the cost of living continue to rise, finding some extra money left over at the end of the month to save is difficult," says Russell. "Whatever the barriers, we've learned that even though people have the intention of saving money, many are not saving enough and they may not be starting early enough."
All three generations surveyed agreed that putting money into your savings account each month is the best way to save. Thirty-four per cent of 18-to-34 year-olds, 41% of 35-to-54 year-olds and 45% of those 55 plus cited this as the top tip. Younger Canadians (21%) try to save money by economizing, such as by bringing lunch to work, more so than those aged 35-to-54 and those 55 plus.
"Though it's ideal to start saving as soon as you start earning, it's never too late to start. Choose the account that's right for you, whether it's a regular savings account, a Tax-Free Savings Account or an RRSP, and start putting a regular amount in every month," says Russell.
Women are better at sticking to a budget
Surprisingly, less than half of all surveyed stuck to a monthly budget during their formative saving years - and of those, women in all generations polled have been more likely than men to stick to a budget. The biggest gap is in the 35-to-54 age group, where 43% of women aged 35-to-54 remember planning and sticking to a monthly budget when they started saving money, compared to only 28% of men.
<< Should I stay or should I go - younger generation saving for a house or travel >>
When it comes to reasons for saving, younger Canadians are more motivated by purchasing a home than those 55 plus say they were when they were young. Twenty-five per cent of 35-to-54 year-olds were motivated by the desire to purchase a home, and 23% of 18-to-34 year-olds want to save for a home, with travel (21%) coming a close second as reason for saving. Only 19% of those 55 plus say they were most motivated by purchasing a home when they started saving money, while 25% say they started putting money away in order to retire.
Some Canadians are not ready for a rainy day
Thinking about their formative saving years, the results revealed that only 54% of 18-to-34 year-olds, 55% of 35-to-54 year-olds and 63% of those 55 plus had savings set aside for an unexpected expense or emergency. Despite this, over three quarters of Canadians surveyed (76% of 18-to-34 year-olds; 82% of 35-to-54 year-olds; 86% of those 55 plus) considered themselves to be financially responsible.
"When the recession hit, a lot of customers came to us for help and advice. One thing that stood out was how few people had something put aside to protect their way of life in an emergency," says Carrie Russell. "While everyone talks about having a regular saving plan, a lot of people never get around to it or find it hard to find the money every month. We've found that saving has to become almost habitual in order for it to be a success, which is why we developed Simply Save."
Simply Save is an automatic saving program that allows customers to save a preset amount every time they use their debit card. Hundreds of thousands of Canadians have signed up and have collectively saved almost $60 million. Further information about Simply Save is available at www.tdcanadatrust.com/accounts/simplysave or by visiting a local branch.
<< Other survey findings: - Canadians have saved for a variety of financial goals - 26% of those 55 plus were motivated to save for retirement - 23% of 18-to-34 year-olds and 25% of 35-to-54 year- olds were motivated to save for a home purchase - 8% of 35-to-54 year-olds were motivated to save for the newest gadgets. - Perhaps a sign of the times, the younger generation (18-34 year-olds) is checking its savings or investment accounts more often than those 55 plus did - 53% of 18-to-34 year-olds are checking at least once a week - 39% of 55 plus checked once a week - 44% of 55 plus taught themselves about savings - Across generations, females have been more likely to count their family as their biggest influence on saving habits. This is true particularly for the 18- to-34 age group today, with 53% of females versus 38% of males learning the most about saving from family - Only 28% of 18-to-34 year-olds feel their debt is manageable >>
For more information about how TD Canada Trust is helping visit www.tdcanadatrust.com/tdhelps.
About the TD Canada Trust Generational Savings Study
The TD Canada Trust Generational Savings Study surveyed Canadians from across the country in three generations - 18-to-34, 35-to-54 and 55 plus - to gather insights and perceptions about savings. The survey was conducted by Angus Reid Strategies from July 24 to 29, 2009 with English and French speaking Canadians using the Angus Reid Forum. The sample size includes 1,001 men and women.
About TD Bank Financial Group
The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Financial Group. TD Bank Financial Group is the sixth largest bank in North America by branches and serves approximately 17 million customers in four key businesses operating in a number of locations in key financial centres around the globe: Canadian Personal and Commercial Banking, including TD Canada Trust and TD Insurance; Wealth Management, including TD Waterhouse and an investment in TD Ameritrade; U.S. Personal and Commercial Banking through TD Banknorth and TD Bank, America's Most Convenient Bank; and Wholesale Banking, including TD Securities. TD Bank Financial Group also ranks among the world's leading online financial services firms, with more than 5.5 million online customers. TD Bank Financial Group had CDN$545 billion in assets on July 31, 2009. The Toronto-Dominion Bank trades under the symbol "TD" on the Toronto and New York Stock Exchanges.
For further information: Carolyn Abbass, Anne Locke, Paradigm Public Relations, (416) 203-2223, cabbass@paradigmpr.ca, alocke@paradigmpr.ca; Erin Baldwin, TD Bank Financial Group, (416) 308-4061, erin.baldwin@td.com