Canadians have an average of $28,000 every single year that is deemed disposable income. That is a lot of income that can potentially be spent by every Canadian on a yearly basis. Every Canadian spends about $17,000 of their total disposable income every 12 months, and that equates to hundreds of millions in yearly commerce spending.
There is a common concern with Canadians. They want to save more. About 88% are looking and willing to change their current financial situation. With all that extra income, they should be able to save splendidly. But, they do not. 31% of Canadians say that they do not want to change their spending habits. What are Canadians buying that is so appealing and hard to let go of? Just as importantly, what kind of habits do they deploy?
1. Impulse Buying
Impulse buying is a normal human activity when there is a little extra income and something “needed” right behind the counter. 36% of Canadians report that they have made impulse purchases recently. 34 have stated that they have regretted a purchase they have made on impulse. A slightly lower number, 20%, report that they specifically regret making that purchase instead of placing the money in a savings account. Canadians are trying to save, but roughly a third are constantly facing the pressure of buying items they do not need and keeping their savings lower because of it.
2. Avoiding Looking at Bills
Shame is not a common result of a series of bad financial spending decisions. 17& of Canadians are reporting that they are ashamed of their financial situation. Ashamed is a strong word, and it suggests an overall corrosive attitude towards finances in the country. It gets worse. About 13% are responding by completely avoiding their bills. They do not look at them, perhaps because they have the payments automated. But, the shame is a major factor.
3. Spending on Boxing Day
Boxing Day takes place December 26th in Canada and many countries throughout Europe. Boxing Day is also a major day to buy items, and that has had a direct effect on spending habits in the country.
Boxing Day is just another contributor to holiday-themed days of shopping. Canada has also recently adopted Cyber Monday and Black Friday into their repertoire, and many companies are offering competitive rates common in the United States. The trifecta of these three holidays has overtaken Canada spinning in the latter months of the year.
4. 25% Family Budget on Food
Canadians are spending about 25% of their family budget on food. Comparably, 75% of their total food budget has gone to grocery store food purchases as opposed to shopping at restaurants, as detailed in a 2002 consumer report. Growth for food restaurants has been slower than the rate of inflation, which shows a new changing trend in canadian spending. Families are placing a greater emphasis on grocery purchases, and the restaurant industry is in an overall downward swing.
5. No Game Plan
A fixed income plan may be a step in the right direction. A fixed income plan states that only a certain amount will be used as “fun money.” The strategy leaves room for unnecessary items, but also leaves room for proper savings. About 31% of Canadians state that they have a fixed monthly income plan. With that said 27% say that they do not have a clear idea of what they can do to save more.
A lack of knowledge is hurting Canadians. The above canada spending habits are hard to fight against. It is so much easier to buy something that brings pleasure over ignoring it and putting the money in the bank.