Disturbing Amount of Ontario Residents Living Paycheque to Paycheque

Let’s face it - payday can be stressful. On the one hand, you’re getting paid (yay!), but on the other, that income is spent surprisingly quick (aw). That being said, a surprising amount of Ontarians are living paycheque to paycheque, making just enough to survive.

With monetary obligations like groceries and bills, it can be tough to strike a balance between saving and spending. Debt often seems never-ending or unmanageable, it’s hard to save enough for retirement, and residents in Ontario have high levels of spending and low rates of saving. Money is often spent as soon as it’s deposited. The Canadian Payroll Association’s annual survey has revealed that 49 per cent of Ontarians are living paycheque to paycheque.

That’s almost half of Ontario residents making just enough money to survive, and sometimes not even that much. According to the survey, 47 per cent of working Canadians report it would be difficult to meet their financial obligations if their paycheque was delayed by even a single week.

The numbers are highest for millennials in their 30s, 55 per cent of whom would have difficulty in that situation, and Gen X-ers in their 40s, 51 per cent of whom would have difficulty meeting financial obligations if their paycheque was delayed.

Real estate plays a factor in how much of their paycheques Ontarians spend. In fact, the number one reason given for increased spending is higher living costs.

As for savings, employees are strapped - 22 per cent of employees say they couldn’t come up with $2,000 within one month for an emergency expense.

Debt levels of working Canadians are also of interest - they are indeed high. Thirty-seven per cent of Ontarians feel overwhelmed by debt. Let’s talk about debt country-wide - 42 per cent of respondents said that it’ll take them over a decade to pay down their debt. An unfortunate 12 per cent even say they will never be debt-free. A whopping 94 per cent of Canadians carry debt, most commonly from mortgages, credit cards, car loans, and lines of credit.

According to the survey, the primary reason for increased debt is higher overall spending, mainly from high costs of living.

With all of this in mind, saving for retirement has become increasingly difficult. Almost half of working Canadians - 46 per cent - say they will now have to work longer than they planned five years ago, and the top reason cited is they are "not saving enough.”

That’s not just among young people - among those Canadians closer to retirement (50 and older), a worrisome 47 per cent are still less than a quarter of the way to their retirement savings goal.

At this point, if breathing has become difficult, don’t worry, there are a few (very few) positive indicators in terms of an economic outlook in this dire situation.

Canada-wide, there has been a five per cent increase in the number of employees with total household incomes of over $125,000 this year, and a slight rise (two per cent) in full-time employment to 89 per cent.

But most employees are still not feeling so hot about this - only 37 per cent of Ontarians expect the economy to improve in their city or town. Nationally, this optimism level has gone down 27 per cent since the first survey in 2009.

Numbers and stats aside, taking action and learning how to manage your money is of the essence here (until, you know, you’re making millions).

"The survey results also show that it is very difficult for people to change or reduce their spending patterns. By paying yourself first through automatic payroll deductions, you are diverting money into a retirement or savings account before you have the opportunity to think about spending it,” said Janice MacLellan, the Canadian Payroll Association's Vice-President of Operations.

The Canadian Payroll Association advises that you save 10 per cent of your net pay with every pay cheque to combat increased spending with automatic saving. That is, setting up automatic payroll deductions.

Hopefully, the outlook will improve for next year. Perhaps the minimum wage increase that's coming up will also help. In the meantime, budget, save for retirement, and maybe even find a side hustle for extra income - just don’t burn out!

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