According to the Annual BMO (Bank of Montreal) Rainy Day Survey released Sept 8, although Canadians average over $35,000 in savings, only one out of four have enough moulah to whether a short term financial emergency of a month or less!
Canadians were asked in a survey by Pollara that if something changed in their financial situation suddenly like a job loss how prepared they were and the results were staggering at best.
- For those who have one month or fewer in savings, the average fund is only $2,051
- 47 per cent have enough savings to cover three months or fewer; up 7 percentage points
- Three-in-ten Canadians are living paycheque to paycheque or spending more than they earn
The percentage of Canadians that have enough savings to only cover one month or fewer has climbed to 27 per cent since 2012 – up 8 percentage points.
“Two-thirds of Canadians have relied on their savings to help deal with unpredictable financial emergencies,” said Christine Canning, Head of Everyday Banking, BMO Bank of Montreal. “In order to avoid taking on an unmanageable amount of debt, the ideal emergency savings fund should be equal to three to six months of your income.”
Other interesting facts revealed in the survey included that the majority of Canadians (52 per cent) have less than $10,000 in emergency savings, with 41 per cent holding under $5,000 and a quarter of those with an annual income over $100,000 have under $5,000 in savings.
What do you think? Are we spending too much or is inflation a big part of the problem? Comments welcome!
SOURCE: BMO Financial Group