A recent survey from TD Bank Group underscores a growing reality for Canadians: the economic climate is reshaping how they approach saving and investing. With nearly half of Canadians uncertain they’re saving enough to meet their financial goals and 45% lacking confidence in their investment knowledge, it’s clear that financial insecurity is becoming a pervasive challenge.
The survey findings paint a stark picture. High living costs are hampering 65% of Canadians’ ability to save, while 30% lack any investment plan at all. Among those without a plan, a significant portion (29%) believe they don’t save enough to make financial planning worthwhile. Even more concerning, 34% of Canadians have never invested, signaling a broader gap in financial literacy and access to investment tools.
This hesitancy to invest is compounded by Canadians’ preference for cash liquidity. Over a third (35%) are prioritizing savings accounts over tax-advantaged options like Tax-Free Savings Accounts (TFSAs) or Registered Retirement Savings Plans (RRSPs). While keeping cash on hand might seem prudent in the short term, it leaves money vulnerable to inflation and misses the opportunity for long-term growth.
What’s particularly striking is the disconnect between perceived barriers and actual solutions. Close to half (48%) of respondents said they’d feel more confident about their financial future with professional guidance, yet only a fraction of Canadians are taking advantage of the resources available to them. TD’s survey highlights that even small steps toward investing—whether through regular contributions to a TFSA or working with a financial advisor—can make a significant difference.
For younger Canadians, the outlook is more optimistic. Generation Z (59%) and Millennials (55%) are more likely to see the value in financial planning compared to older generations. Encouragingly, 68% of Gen Z respondents reported consistent annual investments, the highest rate among all age groups. This signals a generational shift toward proactive financial habits, even as younger Canadians face unique challenges like housing affordability and student debt.
However, the lack of financial literacy continues to hold many Canadians back. Only 30% feel confident distinguishing between the benefits of contributing to an RRSP versus a TFSA. This confusion underscores the urgent need for accessible financial education, particularly during tax season when these decisions can have significant implications.
Pat Giles, Vice President of Saving & Investing at TD, aptly described the challenge: “Balancing competing saving and spending priorities can be challenging. Setting financial goals doesn’t require a large amount to start; it’s about cultivating a habit of investing and sticking to it.” This advice is particularly relevant for Canadians who feel overwhelmed by the idea of investing. Building wealth is not reserved for those with significant disposable income; it starts with small, consistent steps.
Yet, financial institutions also have a role to play. Tools like TD Goal Builder and TD Financial Planning Direct, which offer customized advice and remote financial planning, can bridge the gap for those hesitant to take the first step. Accessible resources like the TD Ready Advice Hub can demystify financial concepts, empowering Canadians to make informed decisions.
The survey highlights a pressing issue: while Canadians are keenly aware of the challenges posed by today’s economy, many feel ill-equipped to navigate them. High living costs, insufficient savings, and a lack of financial education are creating barriers to long-term financial stability.
What’s needed is a cultural shift that normalizes financial planning and encourages Canadians to think beyond traditional savings accounts. With inflation eating into purchasing power and interest rates impacting borrowing, cash reserves alone won’t suffice to secure a stable financial future.
The solution lies in a combination of individual action and institutional support. Canadians must embrace the habit of investing, no matter how small the initial contributions. Meanwhile, banks and financial professionals must continue to provide accessible tools, resources, and guidance to demystify investing and ensure no one is left behind.
As TD’s study reminds us, financial confidence isn’t just about numbers—it’s about having a plan. By equipping Canadians with the knowledge and resources they need, we can build a more financially resilient future for everyone.
S.M.
