Many Canadians are not keeping track of their monthly spending, according to a recent BMO report.
The report on the spending habits of Canadians found that only one-third of Canadians (34%) set budgets for necessary expenses such as housing costs, food and insurance. In B.C., only 32% indicated they had a monthly spending budget.
Furthermore, only one in five (22%) review their essential spending monthly to determine whether they are staying on track. In B.C., only 19% of respondents said they review expenses month-by-month.
According to BMO Economics, this at a time when Canadian households are finding it increasingly challenging to balance household finances. National household debt, excluding mortgages, has doubled in the past decade and consistently outruns disposable income, with the debt-to-income ratio rising from 42% in early 2002 to a record high of 153% earlier this year.
Janet Peddigrew, vice-president, BMO Bank of Montreal, said, “Proper budgeting is the cornerstone of keeping household finances in check as all aspects of the financial picture are affected by how well one manages the funds coming in and going out.
“Having a budget in place is only the first step – being successful is wholly dependent on how closely you monitor it.”