Pattie Lovett-Reid: Are we on the cusp of a financial tipping point?

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TORONTO – Are we facing a critical moment and a potential financial tipping point for Canadians as many deal with the “COVID reality” and “new normal” of life as we know it?

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For the millions of Canadians who have been on the payroll since March 2020, the pandemic appears to be a financial windfall, according to a new report from the Canadian Payroll Association. But now his earnings may be in danger.

The virtual disappearance of many forms of discretionary spending from working from home to commuting, babysitting and commuting has driven costs down.

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In fact, according to a 2021 Canadian Payroll Association annual survey of working Canadians, 53% are able to save more money than they were a year ago, and less (36%) are living paycheck-to-paycheck than before. Huh. 13 years.

However, the question remains: Will the frugal new behaviors imposed on us during the pandemic turn into habits that stick?

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And habits are influential.

More than 70% report they now spend less than their net pay in a specific pay period, which represents an all-time high and an 11% increase since 2019.

More than 40% people have been able to save more than 10% and this is up from 34% in 2019. Even more important, 79% say they are now able to come up with $2,000 in the event of an emergency, and 48% say they can deal with an unexpected expense of $20,000.

These figures are not only encouraging, but also liberating. Spending less and living within your means will reduce stress and household vulnerability when living paycheck to paycheck.

A separate survey conducted by MNP in April found that 53 percent of respondents were $200 or less away from not being able to pay bills or loans.

So a report like this from the Canadian Payroll Association reinforces that the financial resilience achieved through reduced spending can provide families with the financial setback room they need to deal with sudden and unexpected expenses.

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