A new national survey by Credit Canada reveals that the COVID-19 pandemic has drastically affected consumer spending, habits and confidence with many still running on ‘survival mode’ and focusing on short-term goals.
The Financial Priorities Poll, an Angus Reid study of 1,500 Canadians, sponsored by the non-profit credit counselling agency, found that paying bills is the top financial priority for Canadians (54 per cent).
Meanwhile, 44 per cent said cutting back on spending takes precedent during COVID-19. Other financial priorities include:
– having a positive bank balance at the end of the month (36 per cent)
– having an emergency savings fund (35 per cent)
– paying off debt (32 per cent)
– having a high credit score/access to low interest credit (12 per cent)
“While it’s encouraging that Canadians are taking financial responsibility by focusing on paying bills and cutting back on spending, it’s significant that six-in-10 don’t consider a positive bank balance or an emergency savings fund as a matter of great importance,” said Keith Emery, Co-CEO of Credit Canada. “Emergency saving funds are designed for just that – emergencies – and the COVID-19 pandemic has caused an emergency state.
“Of additional concern, almost seven-in-10 don’t consider paying debt to be of great importance and a staggering nine-in-10 do not prioritize having a high credit score,” said Emery. “While it’s hard to focus on all things at once, debt management and credit scores are an important part of the mix, especially during times of financial strain.”
Financial priorities by age
As significant labour market challenges remain for younger Canadians, 18- to 34-year-olds have different financial priorities than older Canadians.
While having a positive bank balance at the end of the month is a top financial focus for younger Canadians (43 per cent), this number drops to 32 per cent for 35- to 54-year-olds and 35 per cent for those aged 55-plus.
Similarly, two-in-five 18- to 34-year-olds (40 per cent) rank having an emergency savings fund as a top financial priority. This declines as Canadians age with the 35- to 54-year cohort at 36 per cent and the 55-plus cohort at 30 per cent.
High credit score as measure of financial success
When asked their main reasons for maintaining a good credit score, the top answer was, “It’s a measure of my financial success” (42 per cent), followed by access to low interest credit (36 per cent) mortgages (34 per cent) applying for credit cards and loans (24 per cent).
Rental applications (13 per cent) and employment (11 per cent) came last.
The financial choices Canadians make during the pandemic can impact their credit score in the long run; it’s important people pay attention to this aspect of personal finance as best they can even during this tumultuous time.
COVID-19 financial resources
With the impact of the COVID-19 pandemic leaving many Canadians concerned about their health, family, finances and career, Credit Canada has pulled together trusted financial information as a safeguard against the noise and misinformation. See the COVID-19 Financial Resource Centre for more information.
Additionally, Credit Canada has a credit score resource page showing Canadians how to obtain their credit score, what it means, and how to work it into better shape.
Credit Canada is a not-for-profit credit counselling agency providing free and confidential debt and credit counselling, personal debt management, debt consolidation and resolutions, as well as preventative counselling, educational seminars, and free tips and tools in the areas of budgeting, money management, and financial goal-setting.
Check out www.creditcanada.com.