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article imageStudy finds Canadians saving less, BoC Governor says debt a risk

By Andrew Moran     Jun 23, 2011 in Business
Toronto - A new study found out that Canadians are saving less than one year ago, but more than half are maintaining a budget. With reports of increasing household debt, Bank of Canada Governor Mark Carney says that can be a risk to the nation's economy.
Statistics Canada released data Monday that showed Canadian household debt increased in the first quarter of this year. The public agency showed that debt-to-income level was up a percentage point to 147.3 percent from January to March. The debt is measured through its entire debt load, including mortgage and consumer debt.
Bank of Canada Governor Mark Carney published a report outlining that this debt could be a severe risk to Canada’s economy and its recovery. During the Senate’s banking committee hearing, Carney said Canadians are as indebted as Americans and the British.
“The high level of household indebtedness has increased financial vulnerabilities in Canada. Canadians are now as indebted (relative to their income) as the Americans and the British,” said Carney. “The proportion of Canadian households that would be highly vulnerable to an adverse economic shock has risen to its highest level in nine years.”
If things couldn’t get any worse, a new study conducted by the Royal Bank of Canada suggests that Canadians are not saving as much as they did a year ago. The poll shows that nearly 40 percent of Canadians are saving less, but 57 percent are keeping a budget.
“Creating a budget you can reference on a daily or weekly basis can help you manage your expenses and keep you on target to meet your goals,” said RBC product manager, Maria Contreras, in a press release. “A savings plan is a lot like an exercise regimen: it can feel overwhelming at first, but if you stick with it you'll see the benefits and know it's worthwhile.”
The poll asked respondents why they find it difficult to save. Nearly a quarter said they couldn’t figure out how much they can afford to save and one-third blamed lack of discipline.
“If you want to make great strides toward achieving a savings goal, having a comprehensive budget that's easily accessible - one you can take a good hard look at - is the best way to get started,” said Contreras.
More about Savings, royal bank of canada, Poll, Canadians, Mark Carney
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