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Helping clients stick to their budgets could prove challenging because many perceive budgets negatively, reveals a survey by Meridian Credit Union.

Despite understanding the upside of cash-flow planning, 44% of Ontarians with budgets say budgeting causes too much stress. And 39% admit they tend to avoid dealing with their financial situations.

Perhaps a contributing factor to those negative responses is a lack of solid financial education. Nearly half of survey respondents (46%) said they learned budgeting skills by trial and error, while 40% learned from parents.

Read: Canadians aren’t making saving a priority: survey

Budget blues

About three in 10 survey respondents have trouble meeting monthly expenses (29%), and 42% admit to deviating from their budgets. Most overspending can be blamed on unexpected expenses (60%) and non-essential luxury purchases (58%).

Read: As spending season begins, Canadians have a debt problem

On the plus side, most Ontarians with budgets have taken positive measures to improve their finances in the last 12 months (76%).

That’s a good thing, especially considering 55% indicate an interest rate increase would impact their monthly spending and saving habits, and 44% would have to make adjustments in order to make ends meet should interest rates rise.

Read: How will rising rates affect a client’s investment portfolio?

About the survey: 1,520 Ontarians completed an online survey between Sept. 25 and Oct. 6, 2017, using Leger’s online panel, LegerWeb. To reliably look at both sides of the budgeting coin, at least half of those surveyed had a monthly household budget in place, while the other half didn’t.

Originally published on Advisor.ca
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