What’s with Canadian’s skewed new-year resolutions?
TORONTO, ONTARIO–(Marketwired – Dec. 30, 2013) – The BMO Wealth Institute today released a study, which found that 80 per cent of Canadians plan to make a New Year’s resolution for 2014 before the clock strikes midnight on December 31st, and more than one-third of all resolutions will be related to personal financial issues.
2014 New Year’s resolutions related to personal finances (36 per cent) rank second to health and fitness (51 per cent), and ahead of:
- Personal (learn a new skill, volunteer, etc.) – 31 per cent
- Love life (dating, marriage, etc.) – 19 per cent
- Workplace (career change, get a raise/promotion, etc.) – 17 per cent
Of those who have made a financial New Year’s resolution in the past, 60 per cent reported that they kept them, versus 42 per cent who have kept resolutions related to health/fitness. “It’s encouraging to see that so many Canadians will be making financial issues a priority in the upcoming year,” said Chris Buttigieg, Senior Manager, Wealth Planning Strategy, BMO Financial Group. “Planning is essential to achieving your goals. If your New Year’s resolution is to lose weight, you will need to follow a plan that includes an exercise schedule and a diet regimen. Similarly, developing a financial plan is only the first step, the second and most crucial step is to implement the strategies recommended in the plan, and finally review the progress of the financial plan at least on an annual basis. Following these steps will increase the chances of reaching your financial goals.”
A financial plan helps people work towards their short and long-term goals, like the purchase of a new home, saving for a child’s education or investing for retirement. It provides a roadmap that outlines the path from where they are today to where they want to be in the future. At BMO, the process begins with a financial professional reviewing a person’s finances – including assets, liabilities, income, spending habits and investments – then building a personalized plan that takes these items and risk tolerance into account and fits with the rest of his/her life.
The survey found that 59 per cent of Canadians currently have a financial plan (down from 64 per cent in 2012). Of those who have a financial plan:
- Eighty-two per cent reported that their financial plan has helped them achieve their goals.
- Sixty-nine per cent wished they would have created one earlier.
- Ninety-three per cent review their financial plan at least once a year.
Barriers to Financial Planning
When asked to identify the reason why they do not have a financial plan, the top reasons cited by Canadians included:
- Do not have enough money to warrant a financial plan (37 per cent)
- Never thought of doing a financial plan (29 per cent)
- Do not know how to start the process (28 per cent)
- Not sure what a financial plan involves (19 per cent)
“Having a financial plan is not contingent on your income or how much you have in investments,” noted Mr. Buttigieg. “A financial plan can benefit anyone who has goals which require funding and is seeking a roadmap to help achieve them.”
Visit BMO’s financial planning website here for a full range of online tools to help you get started.
The online survey was conducted by Pollara with a sample of 1,010 Canadians 18 years of age and over, between November 21st and 25th, 2013. A probability sample of this size would be accurate to ± 3.1%, 19 times out of 20.