There seems to be a gap between plans and reality when it comes to becoming debt-free, according to a new poll released by CIBC.
According to the report, “On average, Canadians holding some form of debt today feel they will be debt-free by age 55. However, the poll also found that only one-third (35 per cent) of Canadians in the 55-64 age group today are actually debt-free.”
"Being debt-free is a long term financial goal for many Canadians, and this poll suggests Canadians are actively looking ahead to the stage of life they will be in when they successfully pay off all of their debt," said Christina Kramer, Executive Vice President, Retail Distribution and Channel Strategy, CIBC.
So then, the key to success appears to be identifying a strategy that is in line with the goal, and sticking to it.
According to the poll, for the most part, Canadians feel that they will be debt-free in 10 to 15 years from the age bracket they are currently in.
What is particularly interesting in the survey results is that, for instance, 25-34 year olds feel that they will be debt free in 10-15 years, but in the 45-54 year old age bracket, only 18% indicate that they are actually debt free.
It is not enough then to sit by and watch the calendar pages turn. It is about employing strategy, with measurable results along the road.
"A key finding in this poll is that the passage of time alone is not enough to achieve the goal of paying down your debt," added Ms. Kramer. "Canadians with a goal of being debt free would benefit from having a realistic plan in place that includes extra payments towards their debt and a strategy to minimize their interest costs."
A small number of Canadians feel that they will carry debt with them for the long term, with 8% indicating that they will be well into their 70’s before they are debt-free.
There is hope. 61% feel that they have made some progress so far this year.
"It can be tempting to believe that ten years from now you will be better off financially and will have paid down your debt considerably, but the reality is that it takes a slow and steady approach to both debt management and savings to make progress towards your financial goals," said Ms. Kramer. "Paying down your debt is no different from having a plan to put money away for retirement - you need a goal and a plan to get you there, and a conversation with an advisor can help you build a strategy and start making progress towards being debt-free."
Source: PropertyWire.ca - August 31/11