The Canadian debt-to-income ratio rose to at an all-time high of 150% this year. But a new survey reveals that Canadians are listening, maintaining optimism, and working towards change.
Helping drive this change is ING Direct Canada. The bank, which was recently acquired by Scotiabank, has launched Small Sacrifices. The new feature appears on the company’s mobile apps and helps Canadians visualize how forgoing everyday indulgences, like buying coffee or lunch, and redirecting that money through small incremental deposits can lead to big savings over the long term.
It’s an important idea to understand because nearly half of respondents said they would currently be unable to manage a 10% increase in monthly payments or rent, while only one third of Canadians are in a better financial situation than one year ago. Further, just 25% of Canadians say their most important financial goal in 2012 is paying off debt.
“It’s encouraging to see more Canadians are optimistic about their financial future compared to last year, even with growing economic pressures at home and abroad,” said Peter Aceto, the CEO of ING Direct. “Despite these promising results, it’s important not to become complacent. Maintaining this positive momentum and savings discipline are key to fulfilling short and long-term financial goals … It’s a shift in thinking and putting your future needs ahead of immediate desires.”
SEE ALSO: How Scotiabank’s acquisition of ING is affecting Toronto’s startup community.
Those who are able to put aside an extra $25 a week intend on doing so by adjusting their lifestyle and cutting back on non-essentials such as eating out (51%), doing less shopping (39%) and reducing spending on entertainment (27%).
Once clients enter in how much money they spend on their average purchase, Small Sacrifices creates a chart showing how much that weekly amount would grow to in the near term (five years) and long term (25 years).