Tuesday, January 15, 2013

Canadians not keeping track of their discretionary spending

One in three Canadians monitors fixed expenses only

MISSISSAUGA, Ontario, January 15, 2013 /Canada NewsWire/ - Many Canadians are taking a carefree approach to spending, acknowledging in a new poll commissioned by Edward Jones that they keep track of fixed expenses, but when it comes to discretionary spending, they aren't paying as close attention. One in three Canadians (29 per cent) only keep track of fixed expenses, such as mortgage, rent or car payments. A further 32 per cent of Canadians do not keep track of their expenses at all.

According to Statistics Canada, Canadian household debt-to-income ratio reached a new high of 164.6 per cent in the third quarter of 2012, which means for every $100 in after-tax income, Canadians owe $65.

"Failing to keep track of expenses could be keeping Canadians in hot water," says Michelle Kay-Scott, Senior Product Manager of Retirement Planning with Edward Jones. "Having a better understanding of where your money goes, from mortgage payments to a dinner out, can help to identify your current spending habits, so you can adjust them as necessary to achieve your financial goals."

Family status makes a difference

Family status is a driving force when it comes to our diligence to keep track of spending. According to the poll conducted by Leger Marketing, Canadians with children are more likely to monitor their expenses compared to those without children (73 per cent versus 65 per cent).

Kay-Scott notes

"Money priorities can change at different life stages, whether saving for a home, expecting a baby or living in retirement. Regardless of family status, it's important for Canadians at all life stages to identify where they stand financially and build a solid plan to meet financial goals."

Identify your discretionary spend with a new web-based app

To help Canadians track their discretionary spending, Edward Jones has launched a new web-based app. The easy-to-use app identifies the costs of everyday items (e.g. dining out, entertainment, new clothing) and calculates how spending on these items could translate into savings toward financial goals, such as retirement or a down payment on a home. Access the app from your smartphone at: ejsavingscalculator.com.

Other key findings from the survey:

...Regionally, Albertans, British Columbians and Ontarians are more likely than Quebecers to keep track of every penny they spend (47 per cent, 46 per cent and 40 per cent versus 30 per cent, respectively).

...Canadians making $40K to $59K are more likely than those making $100K and over to say they keep track of every penny they spend (45 per cent versus 33 per cent).

About Edward Jones

Edward Jones is a full-service investment dealer with one of the largest branch networks in Canada. It is a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund, and a participating organization of the Toronto Stock Exchange. Including its affiliate, Edward Jones serves nearly 7 million individual investors in Canada and the U.S. from more than 11,000 locations.

Edward Jones is a limited partnership in Canada and is a wholly owned subsidiary of Edward D. Jones & Co., LP, a Missouri limited partnership. Edward D. Jones & Co., LP is a wholly owned subsidiary of The Jones Financial Companies, LLLP, a Missouri limited liability limited partnership.

A total of 1500 Canadians completed an online survey between October 1st and October 4th, 2012 using Leger Marketing's online panel, LegerWeb. A probability sample of the same size would yield a margin of error of +/- 3.48%, 19 times out of 20.

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