The new year has arrived, and many Canadians are sporting fresh resolutions. While getting in shape remains one of the most popular vows, Canadians are also quite conscious about improving their finances; debt repayment is the number one goal for most, according to a recent poll by CIBC.
Twenty two per cent of respondents said paying off what they owe is their top goal in 2015 – that’s up from 16 per cent just last year. This shouldn’t come as any shocker, since debt repayment has topped the list for five straight years.
Top Financial Goals of 2015
In comparison, only 12 per cent said building savings was their top goal for the year. Ten per cent said paying bills and getting by were their top priorities, to round out the top three. In fourth and fifth were managing day-to-day spending and budget (9 per cent) and retirement planning (5 per cent).
Retirement Remains a Low Priority
Retirement remains out of sight, out of mind for many young savers – respondents placed planning for old age way down the list.
“Not only have Canadians told us debt repayment is their number one financial priority for five years running, for 2015 we see an even greater number of Canadians focused on better managing debt in the year ahead,” says Christina Kramer, executive vice president of Retail and Business Banking at CIBC. “While it is encouraging that paying down debt is important to Canadians, it is also important not to lose sight of longer term goals like retirement planning.”
With fewer than a quarter (23.7 per cent) of eligible taxpayers contributing to an RRSP in 2012, according to Statistics Canada, Canadians don’t seem to be taking their retirement seriously. This is especially worrisome, since only one-third of Canadians are enrolled in a workplace pension plan. While those in Ontario without a workplace pension plan will be covered by the Ontario Retirement Pension Plan starting in 2017, Canadians elsewhere could be in for a rude awakening when they reach their golden years.
Also read: Ontario Budget: A New Pension Plan>
Credit Management a Top Culprit
While some people are better with their finances than others, there are some general good practices everyone should adopt. Since credit cards are a main source for debt for a lot of people, here are our top three credit card habits to change this year.
1. Live Within Your Means
With MasterCard PayPass and Visa payWave, it’s easier than ever to spent to your heart’s content. The problem is someone will have to pay your bill eventually – and that’s you. Before your swipe or tap your credit card, ask yourself if you’ll be able to pay off your balance in full. If the answer is no, it’s best to keep your plastic in your wallet.
Psst – looking for a way to pay less interest on your credit card balance? Check out the MBNA Platinum Plus MasterCard Credit Card>
2. Check Your Credit Card Statement
With massive data breaches at big box retailers like the Home Depot last year, it’s more important than ever for cardholders to keep a watchful eye on their credit card statement. Consider reviewing your statement once a week and make sure you report any suspicious charges immediately.
3. Think About Small Businesses
Every time you swipe your credit card, small businesses incur costly credit card interchange fees. 1 to 4 per cent of every purchase comes out of the bottom line of retailers. While big business may be able to afford it, it can really hurt small businesses struggling to stay afloat. Be considerate of small businesses and try to avoid premium credit cards or use debit instead.
Sean Cooper is a pension analyst by day and financial journalist by night, living in Toronto, Ontario. He is a first-time homebuyer and landlord who aspires to be mortgage-free by age 31. Follow him on Twitter @SeanCooperWrite and read his blogs and request his writing services on his personal website: http://www.seancooperwriter.com/