Canadian savings focus on the short term

By Wire services | December 14, 2011 | Last updated on December 14, 2011
1 min read

TD Canada Trust says Canadians have built up something of a financial cushion going into the holiday season, thanks to a penchant for putting extra dollars aside.

The problem is, those dollars are too few and are earmarked for more spending, rather than paying down debt.

The bank says a recent survey suggests 53% were setting aside at least 10% of each paycheque as the season began. The bank says almost 60% are planning to build their nest eggs in the new year.

That short-term planning may get them through the holidays, but the issue of household debt remains a problem in Canada. Bank of Canada governor Mark Carney has repeatedly warned that debt levels are too high, and that many Canadians have left themselves exposed to financial setbacks.

Statistics Canada reported Tuesday that household debt has continued to rise, even as consumers see their net worth dwindle. Average household debt in Canada hit a new record high of almost 153% of disposable income in the third quarter, a sizable jump from 150.7% the previous quarter.

Wire services