If you’d rather save money than pay off your mortgage, you’re not alone.
It might sound odd, but 77 per cent of Canadians would rather bank their money than pay down debt, according to a new survey by investment dealer Edward Jones.
Of course, those who said they preferred to save are doing so for a good reason. The majority (41 per cent) said they were putting money towards retirement, while others noted they were saving for their future family or child’s education (30 per cent), or to put towards their emergency fund (26 per cent).
What’s interesting, however, is that after retirement, the second biggest reason Canadians would rather save money is to fuel their current lifestyle. This includes things like buying new clothes, going on vacation, and dining out.
These results are surprising, considering Statistic Canada recently reported that household debt reached a record high of 178.5 per cent in the fourth quarter of 2018.
Debt is a big issue many Canadians face as a result of high rent and mortgage payments, student loans, credit card bills, and so on. So many are struggling, in fact, more millennials than ever are filing for bankruptcy, and one in five Canadians said they will have to liquidate assets to clear their debt this year.
However, it’s possible that Canadians are so overwhelmed by debt that they’d rather save than pay it down.
The Edward Jones poll revealed that Canadians are divided when it comes to which type of debt to pay off first: long-term (ie. mortgage) or short-term (ie. credit card bills). Both received 29 per cent of votes, respectively.
“When it comes to planning for the future, paying down debt is equally as important as saving,” said Patrick French, the company’s principal of solutions tools and consulting. “A financial advisor can partner with you to develop saving and debt payment plans tailored to your lifestyle so that you’re able to address both priorities and stay on track towards meeting your financial goals.”