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From Globe and Mail Article:

For the past 15 years, Canadians haven't been saving money, in large part because there was no pressing need. Rising home prices made people feel richer, and saving for a rainy day was a low priority.

But that economic era is fast coming to an end. A new report to be released Monday shows the toll that years of passive savings is taking on the financial picture of Canadians.

Having relied overwhelmingly on their homes to build personal wealth, the report says the average Canadian consumer now socks away considerably less than their U.S. neighbours, and will have to start saving more as housing prices moderate.

The gap in savings rates between Canada and the United States now sits at an all-time high. At 4.2 per cent, Canada's saving rate is 1.6 percentage points below the U.S., at 5.8 per cent, according to the most recent data. On average, that means Canadians are spending nearly 96 per cent of their after-tax income.

"We in Canada, and in the U.S., have jumped into this recession totally naked, unprotected," said Benjamin Tal, deputy chief economist at Canadian Imperial Bank of Commerce.

His report, titled Back to Old-Fashioned Saving, suggests the average U.S. consumer has been jolted into saving more by the recent collapse of the U.S. real estate market. However, in Canada, where there has been no shock in the housing market, Canadian consumers have felt less compelled to change their financial ways, and begin actively saving more.

Linky and rest of story

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How do you feel about your savings? Are you doing enough to save for the future or a rainy day, or do you feel you should be doing more?

I got advice when I just got married to start saving then, even if it was a small amount. I unfortunately always felt like I was catching up to school loan debt and chasing my rent so I didn't start until in my early 30's. I wish I would of even started with something really small like $25 a month.

Putting away a bit each month now that I try to bump up a bit each year, but still feel I could / should be doing more.
 

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I don't think Canadians are that spendthrift. That is a smokeshow over the fact that the credit economy has made life unaffordable without debt. From an economic point of view, credit was designed to make more people materially wealthier (not actual cash) than the economy could actually furnish.

Maybe we should start to reform the credit system and prices will start to come down. The financial system needs to be targeted with a very big gun; it is destroying the economy.
 

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Canadian By Choice
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Saving as much as I can as I now near retirement. I paid off my own student loan years ago, paid off one mortgage and have 6 more payments on the mortgage of our current house. Put my son through university, so he does not have a student loan, but there went my savings cushion.

So, no vacations for the next few years as we get totally out of debt. Then, and ONLY then, will I even consider retirement. I see far too many profs who retired early and are now coming back and teaching as a sessional because they retired with debt. We shall see.
 

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Saving as much as I can as I now near retirement. I paid off my own student loan years ago, paid off one mortgage and have 6 more payments on the mortgage of our current house. Put my son through university, so he does not have a student loan, but there went my savings cushion.

So, no vacations for the next few years as we get totally out of debt. Then, and ONLY then, will I even consider retirement. I see far too many profs who retired early and are now coming back and teaching as a sessional because they retired with debt. We shall see.
Professors are probably the most underpaid people in Canada (non tenured anyways). With as much education as they have and their responsibilities for shaping the country's leaders and transferring knowledge and skill, they should be paid substantially more.
 

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If they want Canadians to save, borrowing must become more expensive and saving more rewarding. Interest rates below 3% on savings do little to encourage saving and loans at below 4% do nothing to discourage borrowing.

OTH Savings rates exceeding 6% and borrowing exceeding 9% fuels inflation.
 

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Canadian By Choice
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Professors are probably the most underpaid people in Canada (non tenured anyways). With as much education as they have and their responsibilities for shaping the country's leaders and transferring knowledge and skill, they should be paid substantially more.
Adrian, only in the last contract did Memorial University profs get equity with the other universities in the Atlantic provinces. We are now in the middle of the pack. Our problem is that we have one of the lowest tuitions in all of Canada, and tuition only covers about 10% of our salaries.

Still, I am not complaining. As a teleprofessor, I am able to teach from home, which means while I am working every day of the week, I set my own hours when I come online. So, I enjoy what I am doing and feel I am making a contribution to society, and I am paid as well as can be expected -- thus, no complaints.
 

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I started saving right out of university but depleted that cushion for the downpayment on my condo last year... I still max out my rrsp room each year but that's my only real significant savings at this point. On the other hand other than the fairly modest mortgage (in this part of the country at least) on my condo I am debt free so can't really complain too much...
 

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The key is to start young. I started buying shares with 5% of my income every month from age 23. When I was "downsized" at 53 I was almost unemployable except for Walmart. At that time no one wanted someone over 50 with a single job skill so I sought financial advice and retired immediately. I had no debts, still don't, and am able to live not rich but comfy on a fixed RIFF income.

Things are different these days. I graduated from college when I was 22. Got married and had our child right away. Bought a small old house a year later. Those were lean years. No fancy stuff, no expensive toys. Our cars were used wrecks. We were very frugal. It seems these days young folks want their toys, fancy vacations, monster houses and expensive cars right off the bat. I fear for them because they are in for a rude awakening later in life. If you're not putting away at least 5% of your pay by age 30 you may be looking forward to eating dog food later on in life.
 

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Professors are probably the most underpaid people in Canada (non tenured anyways). With as much education as they have and their responsibilities for shaping the country's leaders and transferring knowledge and skill, they should be paid substantially more.
I don't think the topic at hand has anything to do with how much people earn (I'm sure we can all promote a case for each of us to be paid more), but more what lifestyle expectations we have in modern society.

Big house, two cars, expensive vacations, all the newest toys - these are the perceived societal values of the 'good life'. We've also become a society with expectations of instant gratification. Easy credit has enabled these expectations.

I don't make a lot of money, but then I don't spend a lot of money either. We saved, in a separate account, money for our daughter's post-secondary education - $50 every paycheque from the time she was born until she graduated highschool. Our gift to her is to start off life 'debt free'. Compound interest helped a lot.

But she's also observed her parents living a more frugal lifestyle than what is advertised on the TV and has learnt from that example. We don't spend it if we don't have it. We do have credit cards, but they are paid in full each month. Our microwave is 20+ years old. We don't like to buy 'new' things because new things now-a-days are designed with built-in obsolescence, and it used to be cheaper to 'fix' than to 'replace', but now it's cheaper to 'replace' than to try to get someone to fix things. So we keep fixin' the old stuff.

Am I happy with my savings? Yes. I wish I could get a better interest rate, but ... as was pointed out, higher interest rates are usually coupled with higher rates of inflation.

More importantly: am I happy with my life? Yes. I don't see 'things' as bringing happiness. Money is just a tool for buying things or other people's time or expertise.

Use it up, wear it out, make it do, or do without ... and learn the difference between 'need' and 'want'. That's what society needs to relearn. Not just 'how to save', but 'how to live'.
 

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When I was young when asked "how are you doing?" I would often say "not bad for a young fella but I would hate to be this far in debt when I retire."

I have "retired" from my job after 36 years with a severance package taken in payments rather than a lump sum payment. I still have a Mortgage Payment, I pay into an RRSP to reduce my tax load (because of the actions Revenue Canada) as I still work (less than 20 hours a week) on weekends.

You have to be careful of RRSP savings as they comeback to bite you in the butt, by raising your income when drawn down and thereby making people ineligible for supplemental social benefits.

Other than day to day expenses I have no other debt. I have started a saving plan, in hopes of building a nest egg for the future.
 

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Professors are probably the most underpaid people in Canada (non tenured anyways). With as much education as they have and their responsibilities for shaping the country's leaders and transferring knowledge and skill, they should be paid substantially more.
Try firefighters or anyone else who actually puts their life on the line saving other peoples lives... lets get real. :rolleyes:
 

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I used to be very diligent about saving, but a couple of big life changes later, and that got difficult. Am trying to get back on track with that.

Now I have a couple of real estate ventures that are taking longer to make profitable than originally anticipated, so while my net worth looks pretty good, my actual cash in hand is not particularly impressive. Hoping that will change soon.

Still, my long-term stuff is in good shape. Beyond real estate stuff, I have a good chunk in RRSPs as well. It's the short-term stuff that's biting me right now.
 

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I cannot afford to retire, I cannot even afford to die. I immigrated to Canada on 9/11 and because of that and Enron etc., it took me a little more than two years years to find a job, effectively wiping out any savings I ever had. I had to borrow money to eat and to pay the rent.

So, when I found my first job in Canada in 2004 I was already 42 years old. Then I got laid off again for more than a year, again wiping out any savings. Then my wife found a minimum-wage job that helped a little.

So, all in all, for me it is like I am at the stage where one would find a 22-year old. My wife and I have effectively been saving for just around 4 years now.

We do have some toys, not many, we need to go back to India once in two or three years to visit family; we do have and need two cars and we bought a house 4 years ago. Other than that we do not live beyond our means. The mortgage is the only loan we have. We pay our credit cards in full every month. Our only indulgence would be eating out once a week and ordering take-out for a whole week once a month instead of cooking.

Therefore, like I said, I am almost 50 now and can neither afford to retire nor can I afford to die. :)

Cheers
 
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