TORONTO -- Paying down debt remains the top financial priority of Canadians, but it's a goal many appear to be having difficulty meeting, according to a new poll conducted for CIBC (TSX:CM).
The poll found that 26 per cent of respondents named debt reduction as their key financial goal for 2016, the sixth straight year it has topped the list.
Keeping up with bills/getting by came in second, cited as the main priority of 18 per cent of respondents.
CIBC executive vice-president Christina Kramer says the fact debt reduction has remained atop the list for so long, coupled with studies showing household debt remains at record highs, indicates many Canadians are not making the headway they desire.
"It's not just first-time homebuyers, younger Canadians, or those impacted by shifts in the economy, such as a downturn in the oilpatch, who are focused on cutting down their debt," Kramer said.
"Canadians across the country are telling us that reducing the burden of debt, along with keeping up with their bills, is what they are focused on."
In addition to paying down debt and keeping up with bills, priorities named by others included: saving for retirement or for travel or a vacation (eight per cent apiece); adding to their investment portfolio (seven per cent), saving to buy or renovate a house (six per cent); purchase a car or build an emergency fund (four per cent apiece) and saving for their children's education (two per cent).
Fully 11 per cent didn't have a financial priority, while three per cent named other priorities.
The online survey or 1,508 Angus Reid Forum panellists was conducted Dec. 7-8. 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.
"People have taken on more and more debt because they can afford it now. I think in the long term, it'll be a question mark, not everyone will be able to afford their current debt," said Philip Herner, a financial advisor at Assante Capital Management Ltd.
"I think they're realizing that interest rates cannot stay at the low rates that they currently are and so Canadians are starting to realize that reducing the cost of debt is going to become more and more expensive,” said Herner.
Statistics Canada indicated debt loads are rising faster than disposable income.
Household debt compared with disposable income rose to 163.7 per cent according to Statistics Canada’s third quarter report.
To break it down, the average household has roughly $1.64 in debt for every dollar of disposable income.
Herner said in order to keep what you owe low you should "pay down your credit card debt and make bi-weekly payments on your mortgage."
“Paying down your mortgage would be secondary to paying off credit card debt. Credit card interest rates are 16, 18 per cent and that can be crippling for a family.”
-with files from Marta Czurylowicz
