When it comes to household finances, Canadians may be poorer than they know. That’s the blunt assessment from a research report released today by the Certified General Accountants Association of Canada (CGA-Canada).
The report underscores the need for Canadians to get a better grasp of their financial situation.
“While many Canadians appear satisfied with how much wealth they have, they can’t necessarily put a dollar value on it,” says Anthony Ariganello, president and CEO of CGA-Canada. “They therefore may overlook the need to make adjustments to their savings, borrowing and investing behaviours.”
The report reveals a number of troublesome findings:
- 29 per cent of households say they don’t have any wealth and only three in ten Canadians think that wealth accumulation is very important.
- 42 per cent of households are satisfied with the wealth they have, yet over half (51 per cent) say they last calculated their household wealth a year or more ago, never, or could not recall.
- Of Canadians who are building wealth, an overwhelming majority (80 per cent) say they may consume at least part of it in the next three years. When additional funds become available, Canadians may be more likely to use the funds for consumption rather than wealth accumulation.
“Many Canadians are missing a golden opportunity to build some financial security for themselves during this time of low-cost borrowing,” says Rock Lefebvre, vice president of Research and Standards at CGA-Canada andco-author of the report. “What people may not fully appreciate is just because you can take up to 25 years to pay off your home, doesn’t mean you should or need to. In some ways, it’s similar to making only minimum payments on your credit card.”
Note: These are some of the findings of a public opinion survey commissioned by CGA-Canada which examined the attitudes of Canadian households to wealth accumulation. The survey was administered by Ipsos Reid from September 14 to 21, 2012. The interview questionnaire was designed by CGA-Canada in collaboration with senior staff of Ipsos Reid andpre-tested. The sampling methodology was designed to accommodate an online interview process, with respondents making up a representative sample of Canadian adults aged 25 years and over. The survey sample was drawn using Ipsos Reid’s online panel; a total of 1,805 online interviews were conducted with households living in the 10 Canadian provinces. With this sample size, sampling error of plus or minus 2.31% is produced at a 95% confidence level (19 times in 20).