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With the Canadian economic outlook uncertain, and inflation and interest rates the highest they’ve been in decades, a recent CIBC poll sheds light on many Canadians’ desire to take control of their finances so they can weather these challenges and emerge with a stronger personal balance sheet.
CIBC’s Financial Literacy and Preparedness report showed that while most Canadians (60 per cent) are still positive about their current financial situation, a significant percentage (40 per cent) lack confidence in their outlook.
That uncertainty led many to express their desire to know more about financial matters and how to manage their money. Among the respondents, 60 per cent said they want a stronger level of financial literacy and nearly 50 per cent want to know more about the tools and resources they can tap to get a better grasp on their finances.
“In today’s shifting economic environment, many Canadians are motivated to get clarity on their own money matters and learn strategies that could help them reach their goals,” says Carissa Lucreziano, vice-president of financial planning and advice at CIBC.
The poll showed that around two-thirds of Canadians say the current economic environment has them concerned about whether they’ll be able to continue to save money. The majority said paying day-to-day expenses or meeting continuing home expenses makes them anxious.
Some of the key money-saving strategies Canadians are turning to include cutting back on extra expenses (53 per cent), looking for deals (39 per cent), switching to lower-cost brands (36 per cent), bringing in additional income with a side hustle (12 per cent), or finding a higher paying job (9 per cent). To cope with rising costs, some Canadians are only making minimum payments on their debts, have sought out credit limit increases or have opened a line of credit.
“Addressing high-interest debts is essential, and I often tell clients to consider the possibility of debt consolidation,” says Ms. Lucreziano. “For instance, consolidating credit card balances into a loan or line of credit can drastically reduce the interest you pay monthly.”
Ways to boost your financial knowledge
When it comes to money, knowledge is power. Getting a better sense of your overall financial picture, setting goals and having professional advice to help achieve those targets makes all the difference. Many Canadians say they want to have more control over their finances.
In fact, 55 per cent of poll respondents said they feel they need to get a better handle on money matters this year as a majority say inflation and the higher cost of goods are their top concerns, alongside rising interest rates.
The best place to start? Get a good idea of the big picture. “It’s crucial to have a clear understanding of what money is coming in and what’s going out,” says Ms. Lucreziano. “And if you’re wondering where to start, consider CIBC’s online budget calculator.”
This tool prompts users to input their income and expenses and, by doing so, the user is given a clear breakdown of where their money is going.
“You get to see, quite vividly, your spending patterns and how much you’re saving or could potentially save,” says Ms. Lucreziano. “It’s a game-changer for many who are trying to get a handle on their finances.”
Create a habit of setting aside time every week to go over these numbers and take advantage of tools and resources to boost your understanding of your finances. Canadians can find expert advice articles, videos, virtual events and other tools that help answer their financial questions on CIBC’s Smart Advice hub. There are answers to specific financial scenarios, such as buying property with family or friends, and about how to address financial matters like estate planning and investing.
“One of the things I’ve come to realize over the years is that wanting to improve financial literacy is one thing but taking tangible steps toward it requires direction and resources,” says Ms. Lucreziano. “But by leveraging what CIBC offers, Canadians aren’t just improving their financial literacy, they’re charting a course toward a future that’s not only financially sound but one where they navigate with confidence, trust, and a reservoir of knowledge.”
Make investing part of your financial future
Investing is also a key element of financial independence, growth and achieving the life goals you’ve set for yourself, yet only 61 per cent of Canadians have investments.
“Whether aiming for a future home, your child’s education, or a fulfilling retirement, the right investment strategy can serve as the pathway to those milestones,” says Ms. Lucreziano. “And for many, the ultimate goal is achieving financial independence, where the income earned from one’s assets can sustain their desired lifestyle on its own.”
The most widely used investment accounts amongst the population are tax-free savings accounts (79 per cent) and registered retirement savings plans (60 per cent). Within those accounts, mutual funds are a popular choice among Canadians and CIBC offers a breadth of options.
“These funds offer the benefit of diversification and are expertly managed by our seasoned asset managers,” explains Ms. Lucreziano.
Turn to professionals for advice
Having a professional on board who knows not only the investment vehicles but can also assess an individual’s risk tolerance and design a customized investment strategy will help ease any unknowns. For example, CIBC’s professional advisors use CIBC GoalPlanner to translate an individual’s vision into actionable steps.
“Maybe mutual funds align with your risk profile, or you’re interested in a GIC (guaranteed investment certificate) for its safety,” says Ms. Lucreziano. “Whatever the path, it’s crafted with your vision in mind. And for those who favour a hands-off approach, automation is an ally. With pre-authorized contributions, you’re steadily building your portfolio, taking advantage of dollar-cost averaging.”
With more information, Canadians can feel more prepared and capable of taking hold of their financial futures. It requires finding the right professionals to help facilitate those conversations and doing the work together.
“While your advisor navigates the nuances, we always encourage clients to stay informed,” says Ms. Lucreziano. “The goal is to be on a collaborative journey where you’re not just an observer but an active participant in your financial future.”
Advertising feature produced by Globe Content Studio with CIBC. The Globe’s editorial department was not involved.