According to a new poll from the Angus Reid Insitute, half of Canadians under the age of 55 are struggling to put money into savings.
Nathan Mitchell is one of those struggling to save, despite having a decent job as a civil field technician.
“Even as well as I do, I still can’t put anything away,” Mitchell said. “I have people that I’m struggling to pay, and I feel guilty every month and honestly it hurts. But I’m still doing everything I can to save pennies but hopefully one day I can save dollars.”
For Mitchell, he said that while saving for retirement is a worry, most of the pressure comes from wanting to be financially stable to provide for his kids.
“I know what it is like to struggle,” said Mitchell, recalling his childhood with only one source of income. “If I could never provide for my children, I don’t know if I could live with that personally.”
The poll also outlines how a majority of Canadians under 55 say they couldn’t handle a sudden expense of more than $1,000.
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Jason Childs, an economics professor at the University of Regina, said the findings of the poll are not surprising, especially for people who are in the process of trying to buy their first home.
“People who don’t already own their homes outright are going to get squeezed through inflation,” Childs said. “One of the easiest things to cut back on for most people is saving, because saving is a future benefit, not a current fun thing to do.”
And while he said financial struggles for young people have been common for decades, there has never been this level of financial stress.
“Most of the people who are under 55 have no real previous experience with inflation about two or three per cent, and suddenly we get hit by this and a rapidly rising interest rate,” Childs said.
Another culprit in the lack of savings could be a spending hangover from the COVID-19 pandemic. Childs argues many people have carried over poor spending habits from the pandemic, when they could be saving.
“Retail spending has held really strong over the last year or so,” Childs said. “We haven’t seen people start to pull back on the retail spending side yet. It is likely sort of a holdover from the ‘I deserve a treat’ mentality that we saw really set in during the pandemic and the lockdowns.”
And with the lack of money being put away for retirement, Childs said income support programs will be spread thin.
“It’s going to be a real strain on programs like the Canadian Pension Plan, guaranteed annual income supports that seniors get,” Childs explained. “Those kinds of programs are going to become increasingly important for people, and it’s going to be really hard for those programs to keep up.”
Childs said the best thing you can do, if you can afford it, is just put away a few dollars every week or month.
“Set up automatic deductions for a small amount every week or every other week,” he said. “Those add up really quickly. You can put in $20 a week and that won’t take long for that to really add up and work in your favour.”
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