TORONTO, ONTARIO--(Marketwire - July 30, 2012) - One of the most common challenges Canadians face in achieving their financial goals is maintaining control of the household balance sheet.
According to recent numbers from Statistics Canada, Canada's personal savings rate peaked in 1982 at more than 20 per cent of income and has since declined to a current level of around five per cent. Meanwhile, the household debt-to-income ratio is currently at a record high of 152 per cent.
This combination can make it difficult to balance the books - especially as many Canadians are balancing paying off debt while saving for the future. The summer months can create even more of a challenge, as spending habits tend to increase due to a busier social calendar and vacations at home and abroad.
"It can be easy to lose track of daily expenditures, especially during the busy summer months, which may result in unwelcome surprises at the end of the month that can derail the household balance sheet," said Andrew Irvine, Senior Vice President, BMO Bank of Montreal. "The first step to finding a balance between paying down debt and saving for big picture goals, however, is getting day-to-day spending under control."
Mr. Irvine added that by tracking day-to-day spending by using online tools, such as BMO MoneyLogic, Canadians can get a more holistic view of where their money is being allocated, make adjustments where necessary and maintain a balanced budget to keep both savings goals and debt repayment on track.
BMO offers the following tips to remember when balancing the household budget:
Pay Attention: Focus on areas that are easiest to scale back on. Decide which expenses you have control over, such as a morning coffee, and which ones are considered fixed, such as mortgage payments.
Stay Current: New costs can appear at any time. A change in family dynamic, career or even mortgage rates can have an impact on your overall financial plan, which makes it essential to build in flexibility to account for any unexpected life changes.
Set Goals and Stick to Them: Avoid getting carried away when trimming your budget. Set goals that are attainable or you may risk getting further off track from your financial goals.
Strike a Balance: Learn how to save while paying off debt. Finding the balance between the two is the key to successful budgeting and will help you avoid carrying debt for longer than is necessary.
BMO MoneyLogic is part of BMO's ongoing commitment to 'Making Money Make Sense'. Since 2009, BMO has launched BMO SmartSteps, BMO SmartSteps for Business, BMO SmartSteps for Students, and BMO SmartSteps for Parents.
Please visit www.bmo.com/moneylogic or stop by a BMO branch today for more details.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $525 billion as at April 30, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.