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CIBC Financial Report Card Poll: Canadians give themselves high marks on improving their debt management in 2011, but it's back to school on savings

TORONTO, Ontario, June 23, 2011 — As report cards are sent home after another school year in households across the country, Canadians are getting their own report card on their financial performance so far in 2011. The new CIBC Financial Report Card poll reveals that Canadians feel they have earned an "A" so far in 2011 for improving their debt management, but only a "C" for building their savings.

Canadians earned the following grades in the first half of 2011 according to a CIBC/Harris Decima poll, based on the grade chosen most often by Canadians in each category on a scale of A through F:

  • Managing Debt - "A" - 43 per cent of Canadians chose this as their grade based on progress so far this year.
  • Managing the Day to Day Budget - "B" - 39 per cent of respondents chose this grade for the year so far.
  • Building Savings - "C" - 28 per cent - this is the category where Canadians earned the lowest marks, with a further 27 per cent of respondents choosing either a "D" or an "F" as their grade so far in 2011.

"It's encouraging to see Canadians making progress on managing their debt so far in 2011, however they clearly feel they have more work to do when it comes to building their savings for the future," commented Christina Kramer, Executive Vice-President, Retail Distribution and Channel Strategy, CIBC. "Debt management has definitely become a priority for Canadians and these results show that they are paying greater attention to this topic in the first half of the year, with an opportunity to keep working towards their longer term goals for debt reduction."

Just as doing your homework in school was one of the keys to good grades, there are some foundational steps to earning top marks when it comes to your finances:

  • Canadians who took the time to get financial advice earned higher grades. Among Canadians who met with an advisor sometime in the last 12 months, 78 per cent earned an "A" or "B" on debt management. That declines to 66 per cent among those who did not meet with an Advisor.
  • Among Canadians with a regular savings plan in place, 56 per cent earned an "A" or "B" for building their savings this year, compared to just 24 per cent among those who do not have regular savings plans in place.

"There's a clear link between feeling positive about your financial progress so far this year and certain key activities including having a regular savings plan in place, or meeting with an advisor to discuss your overall financial picture," added Ms. Kramer. "Savings is an area where Canadians recognize the need to improve in the second half of 2011, and one of the simplest and most effective ways to do that is establishing a savings plan where money is put away automatically at regular intervals."

There were some notable differences among age groups in the survey:

  • Canadians in the 25-44 age group gave themselves lower marks for their progress on debt management. This age group was more likely to give themselves a "B" in this category (38 per cent) instead of the "A" earned nationally. This age group also had some challenges in terms of budgeting - they were the least likely (20 per cent) to give themselves an "A" for managing their day to day budget when compared to other age groups.
  • Conversely, those 65 and over felt they were the best budgeters in the country, with this age group giving themselves an "A" (44 per cent) for managing their day to day budget, higher than the "B" earned nationally.

"Financial priorities vary depending on your stage of life, which speaks to the need for advice that is specific to your financial goals," noted Ms. Kramer. "Canadians with a mortgage and a young family may have a number of financial priorities within their financial plans, while Canadians enjoying retirement are more likely to focus on effectively managing their budget to make the most of their retirement savings."

The priorities that were part of this survey were based on past consumer polls from CIBC on Canadians' top financial priorities for 2011. Those findings, released in January, identified Paying Down Debt, Building Savings, and Managing Day to Day Budgeting as financial priorities for Canadians this year.

"Canadians have established their priorities for the year, and those priorities have been the topic of many conversations with advisors across our CIBC branches so far in 2011," added Ms. Kramer. "It's encouraging to see Canadians taking a closer look at their financial situation and working with an advisor to map out their next steps towards their financial goals."

Ms. Kramer noted there are a number of strategies Canadians can consider to help improve their financial performance in the second half of 2011 with the help of an advisor. For example, reducing the interest paid to your mortgage can help boost savings or accelerate debt reduction. CIBC's current Mortgage Switch offer provides Canadians who switch their mortgage to CIBC with a competitive interest rate that may be lower than the rate they are currently paying, along with cash back up front to mitigate the costs of moving their mortgage before maturity. The interest savings can then be reinvested into other aspects of a financial plan.

News source: CIBC


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