Top Financial Goal for Canadians is to Reduce Debt
Thursday, February 13, 2014
The new year almost always brings with it many different resolutions that people of all ages aim to fulfill in order to improve their lives, ranging from the personal to the professional. As with former years, many Canadians are intent on accomplishing various financial-related tasks in 2014. But of all the money-based concerns they have for the upcoming 12 months, the one that they most want to tackle is paying down their debt.
The survey, which was performed by the Canadian Imperial Bank of Commerce, found that for the fourth consecutive year, debt was respondents' top financial priority, cited by 16 percent of respondents, down slightly from 17 percent in both 2013 and 2012. In 2011, approximately 14 percent said that they aimed to get rid of their debt, which was still the leading choice.
Christina Kramer, executive vice president at CIBC, indicated it's quite telling that for four straight years, Canadians have made debt elimination their most highly sought-after resolution.
"While the intent to reduce debt is clear, we also know that some Canadians are not yet making the progress they want to on reducing their overall debt levels," said Kramer. "[This] speaks to the importance of having a clear action plan in place to reach your goals in 2014."
Some of this may have something to do with Canadians not taking advantage of other resources, or approaching debt elimination with a "do-it-yourself" mentality. The CIBC poll found that less than half of respondents met with a financial advisor last year. Additionally, among those surveyed, only 6 percent said that debt management would be a subject matter that they would broach.
Don't be afraid to ask for help
Kramer indicated that instead of a go-it-alone approach, which may work for some people, those who have tried this ought to consider reaching out for help from a trusted financial advisor.
"Most Canadians would benefit from taking a broader view of their finances with an advisor including looking at their debt, and then working out a realistic plan to start repaying that debt over time," said Kramer.
The survey also analyzed the top financial priorities at the provincial level. One in five Albertans named paying down debt as their leading money-related concern in 2014, more than any other province. Roughly 19 percent of Ontarians cited debt as well, with 16 percent of Manitoba and Saskatchewan residents saying the same.
By age, debt reduction was the most common response among 35-to-44-year-olds. More than one in four - 26 percent - from this age segment said paying down back payments was the challenge that they most wanted to achieve in 2014.
Debt management can help improve financial literacy, which is an issue that many businesses and consumers focused on in November, given that its Financial Literacy Month. Improving one's understanding of finances should happen only once a year, though, as it requires one's full attention.
The Insurance Bureau of Canada in November offered some suggestions for how Canadians can improve their working knowledge of car insurance and home insurance simply by asking some questions to their insurance representative. Some of these queries might include how debt affects one's insurance policy in terms of premiums. Agents may be able to make some suggestions for how policyholders can assure themselves and their family that their getting the proper coverage without having to put themselves or their finances into jeopardy by paying for unnecessary coverages or how to avoid making a claim. Though insurers provide the brunt of the cost for a claim - such as if a car is badly damaged and requires extensive, costly repairs - the policyholder still has to pay the deductible.