Funding a Financial Cushion

Canadians are changing their savings habits as more and more of us get the feeling we’re headed for a recession.

A year-end survey for Bloomberg News showed only one-third of us are buying what the economists are selling: that we won’t have a recession. More than half of us, by contrast, say there’s at least somewhat of a chance we’ll see the economy contract.

To prepare for that outcome, we have returned to an old standard….we’re putting money aside for that rainy day.

On-line publisher Trading Economics notes the savings rate for the average Canadian has more than doubled in the past year. At this time a year ago, we were setting aside about 1.3% of our income. Today it is more than 3-percent.

That is a big jump but we’re still a miles away from the days when the first Millennials starting to arrive on the planet….in 1982 we were putting just over 20-percent of our monthly pay check into a savings account. In Saskatchewan that number was even a bit higher, pushing beyond 25-percent.

Sources: 1/ https://tradingeconomics.com/canada/personal-savings 2/ https://www.bloomberg.com/news/articles/2020-01-08/recession-fears-persist-among-debt-laden-canadians-poll-finds