Canadians who plan to save this year are aiming to sock away an average of $9,859, but 66 per cent say the money is intended for vacations, luxury items, entertainment and hobbies.
The fact that the Canadians surveyed in the BMO Household Savings Report say they intend to save about $600 more this year than last is encouraging, but they must also act responsibly, says Ernie Johannson, senior vice-president of personal banking at Bank of Montreal.
“It is sometimes difficult to balance financial priorities and responsibilities with spending on items and experiences we enjoy. However, given the economic realities, it is key that we don’t let the nice-to-dos overshadow our must-dos. Having a balanced savings approach allows us to live for today while saving for our future goals,” said Ms. Johannson.
The poll results – released Monday – indicate that men plan to save $11,631 this year, compared with women’s goal of $8,091.
The average total savings among Canadians is $122,310.
Only half (48 per cent) of those surveyed say they are saving enough to meet their goals. The biggest challenges cited are high expenses (71 per cent), low income (65 per cent) and debt repayment (52 per cent).
The personal savings rate stands at a near-historic low of 3.9 per cent, compared with more than 6 per cent at the height of the latest recession, and almost 20 per cent in the early 1980s, according to Statistics Canada numbers cited by BMO Economics.
Retirement savings and emergency savings tied for second place (42 per cent) on Canadians’ priority list for 2013, according to the survey.
Almost one-third (29 per cent) of those polled said they plan to put money into home renovations in 2013, while 19 per cent cited education savings as their priority this year.
Buying a new home was top of mind for 15 per cent of those polled.
According to the report, 63 per cent of Canadians use a registered retirement savings plan (RRSP) or chequing account (57 per cent) as savings vehicles.
Half (49 per cent) say they use a tax free savings account (TFSA), while 29 per cent use a high-interest savings account.
And one-quarter (25 per cent) save via guaranteed investment certificates (GICs).
Among the provinces and regions, those in Alberta said they intend to save $18,035, while British Columbians plan to put away $11,109.
Quebeckers in the survey were at the bottom of the list, with an average of $5,477, while those in Atlantic Canada indicated they’re aiming for $6,698.
The report is based on polling results by a Pollara online survey conducted between Jan. 10 and Jan. 15, using a sample of 1,000 Canadians. A probability sample of this size would yield results accurate to plus or minus 3.1 per cent, 19 times out of 20.