Today’s economic climate may be affecting how far your money goes, whether it’s at the grocery store or the gas pump, and it’s impacting how Canadians invest, too.
Many Canadians don’t feel like they have as much money to invest due to factors such as high interest rates and inflation, according to findings from a recent TD survey1. The survey found that 47% of Canadian respondents have not made – or are not planning to make – any contributions to their investments this year with a major reason being the increased cost of living.
What’s more, 71% said inflation and the high cost of living made it harder for them to accomplish their financial goals in 2023, and 43% said they are not confident they will be able to retire when they initially planned.
But having a personalized financial plan was shown to be a game-changer: The survey found that 90% of Canadian respondents who have a tailored financial plan said it is helping them reach their financial goals.
“That stat is a great reminder of the importance of getting the right advice and establishing a personalized financial plan,” said Pat Giles, Vice President, Saving & Investing Journey at TD.
“At TD, it doesn’t cost anything to meet with a personal banker to discuss your financial goals, and it doesn’t matter what level of savings you have. In meeting with a personal banker, you’ll get trusted advice to help you meet your goals.”
The importance of knowledge and the right advice
Knowledge is an important aspect of whether someone will invest. The survey found that nearly half of Canadians said they are not confident with their level of investment knowledge, and 54% have not developed a personalized financial plan in the past year that is tailored to their objectives.
For those without a financial plan, nearly 40% surveyed said they would feel more confident in their financial goals if they had one.
Giles recommends that Canadians meet with a personal banker at their bank to discuss investment options that work for their individual circumstances and goals. By doing so, people can come up with a reasonable savings strategy based on their needs and life stage and better understand ways to invest.
“There’s no one-size-fits-all approach when it comes to investing,” Giles said.
Some people, for instance, might not be taking advantage of their Tax-Free Savings Account (TFSA), or understand the difference between a TFSA and a Registered Retirement Savings Plan (RRSP). The survey found that nearly 40% of Canadians are not confident they know when to contribute to an RRSP versus a TFSA, and 35% said they are not confident they had selected the right investment vehicles in the past.
“This is why sitting down with a personal banker who can provide advice is the most important step that Canadians can make – particularly at this time of year with the deadline for RRSP contributions coming up on February 29,” Giles said.
Aside from meeting with a personal banker to discuss your personal financial goals (big or small), and how to attain them, improving your financial literacy can help you become more confident with your money overall. You can level up your financial literacy with educational resources from TD, which you can read more at https://stories.td.com/ca/en/article/financial-education-resources.
Every dollar counts
There’s a common misconception that you need a lot of money to start investing – that’s not true, said Giles. “No amount is too small,” he said.
An easy way to start putting money aside is through pre-authorized transactions in your bank account. For example, you can arrange for $100 each month to be taken from your chequing account and moved into a savings account. TD customers can also set up a Pre-authorized Purchase Plan and automatically invest in TD Mutual Funds as often as weekly. (You can read more about pre-authorized transactions at https://www.td.com/ca/en/personal-banking/advice/day-to-day-banking/automated-savings.)
“Even if you’re investing a small dollar amount, that regular savings habit is important and can add up, so you reach a future financial goal,” said Giles.
1 This Maru Public Opinion survey was conducted on behalf of the TD Bank Group and undertaken by the sample and data collection experts at Maru/Blue. From October 23-24, 2023, the online survey ran among 1,524 randomly selected Canadian adults who are Maru Voice Canada panelists. The findings are weighted to reflect the Canadian population and a comparative probability sample of this size has an estimated margin of error (which measures sampling variability) of ±2.6%, 19 times out of 20.
