Canadians focused on debt management: CIBC Poll

When it comes to financial planning, younger Canadians are all about debt reduction, not retirement planning, says a new CIBC poll.

The study revealed paying down debt is Canadians’ number one financial priority overall in 2012, ahead of managing day-to-day spending and retirement planning.

The findings mark a shift in attitude as the new poll showed more Canadians focused on debt repayment in the year ahead than the same poll one year ago.

Paying down debt (17%), managing day-to-day spending and budgeting (14%) and retirement planning (11%) are the top three financial priorities, the survey noted.

“More Canadians are recognizing the importance of managing debt as a component of their overall financial plan, and that is driving an increased focus on debt management and day-to-day budgeting entering 2012,” said Christina Kramer, executive vice-president, retail distribution and channel strategy, CIBC. “Canadians are also increasingly seeing the connection between good management of their day-to-day budget and their longer-term financial goals, recognizing that taking smaller steps today as part of a plan can lead to significant benefits down the road.”

However, financial priorities among Canadians vary across age groups. While 23% respondents in the age group of 25-44 named paying down debt as their top financial priority, it was retirement planning for 20% participants in the age range of 45-64 years old. For 24% of those over 65, it was managing day-to-day spending.

“It’s not surprising to see that the financial needs of Canadians vary at different stages of life, which speaks to the need for individual financial advice,” said Kramer. “For example, baby boomers have a clear focus on retirement, while Canadians over 65 years of age are focused on cash-flow management, given that many in this age group have started drawing on their retirement savings.”

With interest rates at historic lows, 2012 presents a good opportunity for Canadians to make progress on debt repayment as part of their long-term financial plans, she added.