Canadians concerned about lack of savings

Canadians are worried about making ends meet despite having a decent salary and many believe that today’s new norm is living paycheck to paycheck.

While many financial experts cite the general rule of thumb is that 20 percent of your paycheck should go towards savings, a survey from H&R Block reveals that most Canadians are nowhere close to this goal. In fact, 43 percent say they're not typically putting any money aside towards savings, of which 31 percent say it's because they don't have money left over from their paycheck and 12 percent say their paycheck doesn't even cover the cost of living. Of the Canadians that do put aside savings, 39 percent put less than 10 percent of their paycheck into savings, and only 19 percent of Canadians put away the recommended amount of 20 percent or more of their paycheck into savings.

"While many Canadians continue to hold a mix of tax-friendly savings accounts including Registered Retirement Savings Plans (RRSPs), Tax Free Savings Plan (TFSAs), and First Home Savings Accounts (FHSA), our research indicates that most Canadians are putting less into savings overall due to the increased cost-of-living,” says Yannick Lemay, a tax expert with H&R Block Canada. “This creates short-term concerns around not being able to cover unexpected expenses without taking on more debt, as well as long-term concerns with creating a nest egg and retirement planning. This tax filing season, 88 percent of Canadians say they're relying even more on maximizing their refund to put money back into their pockets and to help build a 'rainy day' fund. The good news for all Canadians is that there are hundreds of existing, new, and enhanced tax benefits and credits to help maximize their refund."