Just six per cent of Canadians cited saving for retirement as a financial priority in 2019, according to a new survey by CIBC.

Paying down debt was the top financial priority for survey respondents, followed by keeping up with bills and getting by (14 per cent), growing wealth (12 per cent) and saving for a vacation (7 per cent). Almost a third (29 per cent) said they’ve taken on more debt in the past 12 months. 

Read: How RBC is fitting debt payment into employees’ financial journeys

“Debt weighs heavily on Canadians, so it’s no surprise that Canadians continue to put debt concerns at the top of their list of priorities each year,” said Jamie Golombek, managing director of financial planning and advice at CIBC. “Debt can be a useful tool for achieving long-term goals, such as home ownership or funding education, but if you’re turning to debt to make ends meet, it may be time for cash-flow planning instead.”

The top reasons cited for incurring debt are to cover day-to-day items (34 per cent), purchase a new vehicle (24 per cent) and pay for a home repair or renovation (20 per cent). Survey respondents were also concerned about the rising cost of goods or inflation (64 per cent), the low Canadian dollar (34 per cent) and rising interest rates (31 per cent).

“There’s rarely enough money to do everything, so it’s critical to make the most of the money you earn by prioritizing both sides of your balance sheet – not debt or savings, but both,” said Golombek. “It boils down to trade-offs, and balancing your priorities both now and down the road. The idea of being debt-free may help you sleep better at night, but it may cost you more in the long run when you consider the missed savings and tax sheltered growth.”

Read: Half of Canadians say financial stress is affecting workplace performance: survey

Often temporary downturns are nothing new, said Golombek. The real risk for investors is they’ll make knee-jerk reactions they’ll likely regret when the market rallies again and they miss out on those gains, he adds.

“Ups and downs can be distracting, but it’s important to stay invested and not let short-term market noise knock you off course,” said Golombek.

Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

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