Canadians spend cautiously, opt to save for emergency funds and investments, Scotiabank report reveals

Scotiabank Money Readiness Poll finds 34% of Canadians adjusted their investment strategy as a result of the pandemic

TORONTO, Nov. 12, 2020 /CNW/ - According to a recent Scotiabank survey, Canadians are becoming better savers while keeping their spending down in light of the ongoing complexities surrounding COVID-19. Most Canadians are being cautious with their spending (79%) and have made saving for an emergency a priority since the COVID-19 pandemic started (53%). More than half of Canadians (58%) say they are putting extra money they are not spending while in lockdown into their savings accounts, and more than one-third (38%) are adding to their investments.

Canadians are cautiously optimistic about their financial future. They’re saving more and open to investing. (CNW Group/Scotiabank)

Scotiabank polled over 1,500 Canadians to learn more about their saving and spending habits since the pandemic began and found that one in four Canadians (25%) have been able to save more because of reduced spending in other areas of their lives. Canadians who are saving more say they are spending less on: eating out (75%), entertainment (81%), clothing and apparel (58%), and commuting costs (41%).  Also, more than a third (37%) who are putting more money aside have made saving a priority since COVID-19.

"The pandemic has prompted many Canadians to reassess their personal finances and short-term priorities, shifting how they manage their money and planning for whatever uncertainties lay ahead," said D'Arcy McDonald, SVP, Deposits, Investments, & Payments at Scotiabank. "Not only are Canadians making savings a priority, but with different spending patterns created by the pandemic, many are seeing their savings grow even faster. This is an important time to speak to your financial advisor to ensure you have the right plan in place that helps you invest and put your money to work."

Canadians who find themselves saving more money are using the extra cash to build up an emergency fund (61%), invest (34%), pay down debt (29%) and save for a big purchase (26%).

This shift in how Canadians are managing their money is also contributing to how prepared they feel to manage the uncertainty caused by the pandemic. Approximately 41% of Canadians reported feeling financially prepared to manage through the pandemic, compared to 35% just 6 months ago.

Holiday Spending During COVID-19:

The strong majority of Canadians (88%) are expecting the holiday season will be very different this year. However, 39% of Canadians love to spend money on the holidays and won't let the pandemic change that, while 43% of Canadians say finding extra money to spend this holiday season will be challenging. More than half (56%) of Canadians said they plan to pull back their holiday spending this year because of other financial priorities, while roughly 30% of Canadians said they plan on spending more than usual on the holidays because of the extra money they were able to save during the pandemic. 

Investing in Uncertain Times Virtual Panel on November 24

On November 24, 2020, Scotiabank's top financial experts will answer the most frequently asked questions they've received from Canadians during the COVID-19 pandemic. They will cover everything from the economy, saving, investing, and finding balance during these tough times. Visit Scotiabank.com/investing to learn more and register here for the virtual panel and get their expert advice.

Scotiabank's Top Tips for Savings and Investing: 

• Determine how much you can save: With COVID-19, this number may be different than what you think. Start off by calculating your monthly expenses, including items like rent or mortgage, utilities, and an updated summary on transportation costs, groceries, child care, etc. Don't forget to use unexpected windfalls, like tax refunds or bonuses, to help speed up the funding process. Contributing whatever you can to your fund, even $20 a month, will make a big difference over time.
• Save automatically and pay yourself first: Make it easy on yourself by scheduling automatic deposits to your emergency fund. Setting up pre-authorized transactions will allow you to save without having to think about it.
• Put your money to work: Whether you're saving for retirement or building a nest egg, the right investment strategy is essential to growing your money and making your financial goals possible.
• The value of advice. TFSAs, RRSP, RESPs. There is a lot you can do. Speaking with an advisor can help you choose which option is best for you and your goals. Canadians can visit the new ScotiaAdvice+ Centre or contact a Scotiabank advisor today to discover the power of a simple conversation.

Scotiabank's Money Readiness also found:

• 58% of Canadians are putting extra money that they're not spending while in lockdown into their saving accounts (chequing, high interest savings account etc.) and 38% are putting the extra money into their investments (RRSP, TFSA, etc.).
• 33% have had to draw money from their savings to pay for day-to-day expenses during the pandemic.
• 27% of Canadians are saving more money as a result of COVID-19, while 14% are saving less money. 18% are not able to save any money at all as a result of COVID-19.
• 41% of Canadians say COVID-19 has had no impact on their savings behaviour.

Methodology: The 2020 Scotiabank Money Readiness Poll was conducted by Maru Blue on October 7, 2020. A total of 1,511 surveys were collected from a random sample of panel members across Canada.

Advice+
The success of our customers is at the heart of our business at Scotiabank. Since the COVID-19 pandemic began, Scotiabank has helped more than 375,000 customers receive loan assistance plans and provided thousands of customers with advice to help them navigate through challenging times. Advice+ is championing our customers' financial goals with a tailored plan, plus the resources and education, and professional support that will help them stay on track. Canadians can visit the new ScotiaAdvice+ Centre or contact a Scotiabank advisor today to discover the power of a simple conversation.

About Scotiabank
Scotiabank is a leading bank in the Americas. Guided by our purpose: "for every future", we help our customers, their families and their communities achieve success through a broad range of advice, products and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. With a team of over 90,000 employees and assets of approximately $1.2 trillion (as at July 31, 2020), Scotiabank trades on the Toronto Stock Exchange (TSX: BNS) and New York Stock Exchange (NYSE: BNS). For more information, please visit our website and follow us on Twitter @ScotiabankViews.

SOURCE Scotiabank

For media inquires: Carina Ruas, T: 416-590-7928, E: [email protected]

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