DNY59 / iStockphoto

More than half of Canadians admit to engaging in what debt experts call risky financial behaviours.

A recent survey from insolvency firm MNP LTD, released on Monday, found that 53% of Canadians are guilty of costly money mistakes that contribute to consumer debt, including making minimum debt payments and borrowing money they can’t pay back.

Paying only the minimum balance on debts was the most common risky behaviour among Canadians last year, with 21% of respondents admitting to the behaviour. Residents of Saskatchewan and Manitoba (each 28%) and Alberta (26%) were most likely to confess to making only minimum payments, as well as those with children (33%).

About one in 10 Canadians (12%) also admitted to borrowing money they knew they couldn’t afford to pay back.

Further, one-fifth of Canadians (18%) have lost hope of ever being able to pay their debts. Canadians who are more optimistic still think they’ll struggle for years to come, with half of respondents (50%) predicting seven years will be required to be completely debt-free.

One-third of Canadians (32%) said they had no debt obligations.

Invest or hold cash?

When it comes to deciding what to do with extra cash, Canadians are divided.

According to the latest RRSP study from BMO, also released on Monday, Canadians are almost evenly split between investing savings (53%) and holding cash (47%).

Millennials are most likely to hold savings as cash (57%), while gen-Xers and baby boomers prefer to invest (54% and 64%, respectively). Regionally, those in Atlantic Canada are most likely to keep their savings in cash rather than investments (51%).

The survey also found that, while more than three-quarters of Canadians (77%) have investments, only one-third are confident they understand the ins-and-outs of investing.

About the surveys: BMO’s RRSP survey was conducted by Pollara Strategic Insights between Nov. 26 and Dec. 3, 2019, using an online sample of 1,500 adult Canadians. The MNP Ltd. survey was conducted by Ipsos from Dec. 4 to Dec. 9, 2019, using a sample of 2,000 adult Canadians.