Finances, debt top Canadians’ New Year’s goals

While many people resolve to get physically fit every Jan. 1, it appears as though a considerable percentage of Canadians have made getting fit financially their main aim in 2014, according to newly released survey data.

The poll, which was conducted by Google and commissioned by credit agency TransUnion, found that nearly 50 percent of respondents cited a money-related concern as being their leading goal over the course of the next 12 months. Of those who mentioned finances, roughly one in four said that they wanted to save more money, while another 25 percent indicated that they wanted to reduce their debt load. Just over one in five – 23 percent – said that they wanted to try and spend less money on expenses that weren't necessary.

One of the reasons why so many Canadians cited finances as a prime concern for them in 2014 may have something to do with their not accomplishing them in 2013. The survey revealed that nearly four in 10 respondents didn't fulfill their money-related aim last year versus just 19 percent who said that they did.

Julie Springer, vice president at TransUnion, said that the new year serves as the ideal time for consumers to recommit to their financial goals, as consumers can view it as a clean slate.

Paying down debt named top financial aim for fourth straight year
Confirming just how focused many Canadians are on improving their financial position in 2014 is a separate survey from the Canadian Imperial Bank of Commerce. For a fourth consecutive year, respondents said that paying down debt was their leading fiscal goal in the new year, cited by 16 percent of respondents. From 2011 through 2013, debt reduction was the most common response as well.

Christina Kramer, executive vice president for CIBC, noted that the continued presence of paying down debt on Canadians' list of New Year's resolutions suggests that they aren't achieving what they are setting out to do. As a result, they may want to alter their strategy.

"While the intent to reduce debt is clear we also know that some Canadians are not yet making the progress they want to on reducing their overall debt levels," said Kramer.

She added that this speaks to the importance of having a plan of action in place, which may be best implemented through the assistance of a trusted financial advisor.

"Despite being top of mind for 2014, many Canadians don't think about sitting down with an advisor and having a conversation about how to reduce their debt," said Kramer. "Trying to do-it-yourself can work for some people, but most Canadians would benefit from taking a broader view of their finances with an advisor including looking at their debt, and then working out a realistic plan to start repaying that debt over time."

Debt can have an impact in various aspects of life, even in the insurance realm. Policyholders may want to consider speaking with their local car insurance representative about how debt can affect what they pay in rates, as well as tips for how they can buy a sufficient amount of coverage without having to worry about being underinsured.