Fewer Canadians able to save money amid tough economic times: ‘Huge shift and not a good one’ – Okanagan | 24CA News
Putting apart cash for a wet day has grow to be more and more difficult.
With excessive inflation and rising rates of interest, saving cash isn’t one thing many can afford to do anymore.
“Very little, very little,” mentioned Kelowna resident Gil Kafka. “Everything is too expensive.”
The sentiment was echoed by Shane Bump, one other Kelowna resident, when requested how exhausting it’s to save cash.
“It’s very difficult, everything is more expensive,” Bump advised Global News. “You’re not getting the same returns on your money.”
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On Wednesday the Bank of Canada raised the important thing lending price to 4.5 per cent.
It’s the eighth enhance in lower than a yr.
That mixed with excessive prices for issues like groceries and gasoline has meant there’s little left to develop that nest egg, one thing that’s vastly totally different from the way it was.
“When we go back to the late 1990s … the average savings rate was double digits, 12, 13 per cent, that’s how much we set aside,” mentioned Scott Hannah, president and CEO of the Credit Counselling Society. “Today people aren’t saving. They’re taking their money that was in savings, and they’re spending it to make ends meet. That’s a huge shift and not a good one.”
Not solely are individuals saving much less, Hannah mentioned they’re residing past their means.
The Credit Counselling Society, which helps individuals get out of debt for gratis, has seen a 100 per cent enhance in purchasers from this time final yr.
“If there was ever a time to make friends with a budget, it’s now,” Hannah mentioned. “Your budget is your best friend and really, you can’t afford to spend more than what’s coming in for an extended period of time. It’ll catch up with you.”
While managing funds is crucial to make ends meet, a Kelowna psychologist mentioned it’s additionally important to psychological well being.
Dr. Delaine Shackleton mentioned monetary stress is usually a large catalyst for despair and anxiousness.
“If you start experiencing financial pressure, then you might start doing things like socially withdrawing and find yourself consumed with thoughts about money and how you’re going to make it and then that can lead to anxiety and depression and can be a precursor,” Shackleton mentioned.
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That despair and anxiousness mentioned Shackleton can then result in much more spending.
“It’s that quick dopamine hit that you get from spending money,” she mentioned. “It can start to be more financial stress as you’re becoming more depressed because you start spending more to get that dopamine hit.”
For households feeling the stress, specialists say it’s vital to incorporate kids in age-appropriate conversations about funds.
“Have a conversation with your family saying really, what we need to do is ensure that you’ve got a roof over your head. We’re looking after our families to the best of our ability, and we’re going to need to make some changes so we can continue to do that,” Hannah mentioned. “So that reassurance is important.”
© 2023 Global News, a division of Corus Entertainment Inc.
