[Canada] Has a financial tipping point been reached?

Has a critical moment and potential financial tipping point been reached as many Canadians deal with the "COVID reality" and the "new normal"? For millions of Canadians who had remained on the payroll since March 2020, the COVID-19 pandemic seemed to have been a financial windfall. However, the results of a new survey suggest their gains may be at risk, CTV News reports.

Working from home has resulted in reduced costs from commuting and childcare and the virtual disappearance of many forms of discretionary spending.

According to the 2021 Canadian Payroll Association Annual Survey of Working Canadians, 53 per cent have actually been able to save more money than a year ago and fewer (36 per cent) are living paycheque-to-paycheque than at any time in the past 13 years.

But CTV News wonders if these frugal new behaviours will translate into post-pandemic habits that stick? Because the habits are impressive.

More than 70 per cent of respondents report they now spend less than their net pay in a typical pay period, representing an all-time high and an increase of 11 per cent since 2019.

More than 40 per cent have been able to put more than 10 per cent towards savings, up from 34 per cent in 2019. And an even more significant 79 per cent say they are now able to come up with $2,000 in the event of an emergency, with 48 per cent saying they could manage an unexpected expense of $20,000.

These data points are not only encouraging, they are liberating. Decreased spending and living within your means will reduce stress levels and household vulnerability when living paycheque-to-paycheque.

A separate survey conducted by MNP in April found that 53 per cent of respondents were $200 or less away from not being able to pay a bill or debt.

Therefore findings like this from the Canadian Payroll Association reinforce the fact that financial flexibility achieved through lower spending can provide families with enough financial wiggle room to deal with a sudden and unexpected expense.

Has a critical moment and potential financial tipping point been reached as many Canadians deal with the "COVID reality" and the "new normal"? For millions of Canadians who had remained on the payroll since March 2020, the COVID-19 pandemic seemed to have been a financial windfall. However, the results of a new survey suggest their gains may be at risk, CTV News reports.

Working from home has resulted in reduced costs from commuting and childcare and the virtual disappearance of many forms of discretionary spending.

According to the 2021 Canadian Payroll Association Annual Survey of Working Canadians, 53 per cent have actually been able to save more money than a year ago and fewer (36 per cent) are living paycheque-to-paycheque than at any time in the past 13 years.

But CTV News wonders if these frugal new behaviours will translate into post-pandemic habits that stick? Because the habits are impressive.

More than 70 per cent of respondents report they now spend less than their net pay in a typical pay period, representing an all-time high and an increase of 11 per cent since 2019.

More than 40 per cent have been able to put more than 10 per cent towards savings, up from 34 per cent in 2019. And an even more significant 79 per cent say they are now able to come up with $2,000 in the event of an emergency, with 48 per cent saying they could manage an unexpected expense of $20,000.

These data points are not only encouraging, they are liberating. Decreased spending and living within your means will reduce stress levels and household vulnerability when living paycheque-to-paycheque.

A separate survey conducted by MNP in April found that 53 per cent of respondents were $200 or less away from not being able to pay a bill or debt.

Therefore findings like this from the Canadian Payroll Association reinforce the fact that financial flexibility achieved through lower spending can provide families with enough financial wiggle room to deal with a sudden and unexpected expense.