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TD Canada Trust 2011 Report on Savings: Many Albertans focus on servicing debt over saving
- But automatic savings programs help: More than 116,000 Albertans use the TD Canada Trust "Simply Save" program -
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CALGARY, April 20 /CNW/ - Trying to balance their books, Albertans are most likely in the country to admit they neglect their savings accounts in favour of paying off debts (49% versus 39% nationally), according to the TD Canada Trust 2011 Report on Savings released today.
The report, which was developed by TD Canada Trust to understand Canadians' habits, attitudes and knowledge on saving in the current economy, found more than half (55%) of Albertans find it a real struggle or impossible to save.
But it's not all doom and gloom. Almost one third (31%) of Albertans have four months or more of living expenses tucked away for a rainy day. And according to the report, services like automatic savings programs are helping Canadians take back the reins on their finances. Canadians who are enrolled in an automatic savings program are more likely to have at least one to three months of living expenses saved, compared to those who don't participate in an automatic savings program (75% versus 57%).
There are a variety of automatic savings programs, and increasingly, Canadians are taking advantage of them. For instance, a pre-authorized transfer allows people to regularly and automatically save a portion of their income (e.g. every pay cheque) without ever even seeing it, or presumably, missing it. Others automatically transfer a small preset amount into customers' savings account with an access card transaction, like a debit purchase or an ATM withdrawal. Since its launch in May 2009, more than 116,000 Albertans are actively using the TD Canada Trust "Simply Save" program. Together, they have saved nearly $60 million dollars through small transfers of up to $5 per transaction.
"Two years ago we were hearing from customers what a challenge it was to save," says Carrie Russell, Senior Vice President, TD Canada Trust. "We launched the Simply Save program because it makes saving effortless. And a small shift in your everyday behaviour can lead to more meaningful changes. As the saying goes, take care of the pennies and the dollars will take care of themselves. If you're having difficulty, start small and automate, which helps take the pain out of saving."
"We're proud of our customers in Alberta for saving a total of almost $60 million dollars in two years," says Tom Price, District Vice President - Calgary, TD Canada Trust. "For an average family, the amount saved through the program could cover an unexpected car repair, hockey equipment for the kids, or a weekend out of town for parents. We encourage our customers and all Canadians to challenge themselves go further. The reality is that most Canadians need to put away significantly more than they currently do for their future."
TOP SAVINGS GOALS:
Albertan's top savings goals are to save for retirement (79%), to pay off their credit card (75%) or line of credit or loan (65%), and to save for a vacation (63%). To achieve their goals, 59% say they save a portion of their pay cheque every month, and 27% say they save more than 10% of their income.
"Aim to set aside 10% of your pre-tax income each month for emergencies, retirement and other savings. If you're finding it hard to save, work up to it," says Russell, but don't make the mistake of not saving at all just because you can't reach that goal right away."
EASE THE SQUEEZE:
The report found that some Albertans who are feeling the savings squeeze are getting themselves further in debt through interest charges and late fees:
- 20% have had to borrow money from family or friends
- 18% only make minimum payment on their credit cards
- 18% regularly pay late fees
Paying bills late or missing payments altogether will damage your credit rating and make it difficult for you to borrow money in the future for a real emergency or opportunity. "Pay bills online and set up automatic payments from your everyday bank account to ensure you're never late. If you're strapped for cash one month, then at least pay the minimum required," says Russell. "If you're finding yourself in over your head and unable to make your bill payments each month, then talk to your bank about possible ways to consolidate your debt and get help managing your money."
FINANCIAL LITERACY IS IMPORTANT TO ALBERTANS:
According to the report, 68% of Albertans admit they are not very knowledgeable about saving, and many are interested in receiving professional advice on how to save money (59%), reduce their debt (56%) and create a budget (46%). "A basic knowledge of financial literacy, like understanding how to follow a budget, ensure you have enough money to pay your bills, and put aside money into savings, is essential to secure a solid financial future," says Russell.
About the TD Canada Trust 2011 Report on Savings
The TD Canada Trust 2011 Report on Savings polled a representative sample of 1,003 adult Canadians - including 106 Albertans - through a custom, online survey. The survey was conducted by Environics Research between December 2-7, 2010.
About TD Canada Trust
TD Canada Trust offers personal and business banking to more than 11.5 million customers. We provide a wide range of products and services from chequing and savings accounts, to credit cards, mortgages and business banking, to credit protection and travel medical insurance, as well as advice on managing everyday finances. TD Canada Trust makes banking comfortable with award-winning service and convenience through 24/7 mobile, internet, telephone and ATM banking, as well as in over 1,100 branches - most open 8 'til late and many now open Sunday. For more information, please visit: www.tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank Group, the sixth largest bank in North America.
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