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If you lost your job, would you have enough money saved to keep you afloat? Although Canadians on average have more stowed away in emergency savings accounts than in the past, a large number are still living paycheque to paycheque.
A new poll conducted for the Bank of Montreal showed that Canadians had emergency savings of $41,694 on average. That’s up from an average of $35,237 in 2014.
However, nearly a quarter (24 per cent) of Canadians said they’re living paycheque to paycheque and more than half (56 per cent) said they have less than $10,000 in emergency savings.
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Forty-four per cent have less than $5,000 saved for emergencies; 21 per cent had less than $1,000.
Experts say ideally Canadians should save three to six months of income in an emergency savings account, to keep them above water should an emergency arise.
All too often when an emergency strikes, Canadians without sufficient savings take on debt. Nearly half of those polled (46 per cent) said in the past, not having an emergency fund had put them further in the hole.
The majority (58 per cent) said they had to delay their goals in order to deal with financial setbacks.
“An emergency fund represents more than just a cushion – it provides peace of mind and helps reduce the risk of increased debt when faced with a financial emergency,” said Christine Canning, head of everyday banking at BMO.
When asked what types of financial emergencies stressed them out the most, medical expenses topped the list, with 72 per cent of respondents saying it was their top concern, followed closely by losing their job (71 per cent). Major car repairs (61 per cent) and unexpected home repairs (59 per cent) were also big sources of concern.
The online survey polled 1,002 Canadians 18 years of age and older Aug. 17 and Aug. 18. The polling industry’s professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.
With files from The Canadian Press