A new CIBC survey shows a quarter of Canadians say paying down debt is their top personal finance priority for 2018 as has been for the previous seven years. And we know how well that’s been working out for households in this country. So is there any reason to believe next year will be different?
As a collection operating in Edmonton, Calgary and the GTA we recognize that the vast majority of consumers we inevitably end up dealing with are good people, with good intentions that have now simply arrived at the tipping point of having to either try to continue to rob Peter to pay Paul or, in the alternative, to make some hard choices in monthly budgeting in order to honour their outstanding financial obligations.
One-quarter of the 1,524 Canadians surveyed online between Dec. 11 and Dec. 12 said debt payment was their main focus heading into 2018, while some Canadians (13 per cent) will prioritize growing wealth, and seven per cent plan to focus on saving for retirement.
Over half surveyed in the poll said they regret not paying down more debt before interest rates rise and only 16 per cent said they achieved their financial goals in 2017.
Just over one-quarter (26 per cent) of respondents said they took on new debt this past year in order to manage day-to-day expenses or deal with a financial emergency.
Going into the new year, two-thirds of Canadians (67 per cent) said they need a better handle on their finances, with 55 per cent planning to cut non-essential spending and over one-third intending to create a budget.
Additionally, twice as many people compared to last year’s survey said they will create an emergency fund and an automated savings planed.
Only nine per cent of Canadians said they don’t plan to set financial goals for the coming year.
From our view, based on the trends we see in the third party debt recovery industry we suspect another survey 12 months hence will reports numbers pretty much the same. There is nothing more predictable than human nature, most especially in an environment of historically low interest rates. Keep in mind that even in the event of an unimaginable doubling of interest rates over the next 12 months (yeah right) we will remain well below historic levels.