Finder Money Newsletter: Mar. 14, 2023
Most of us know what’s not good for us, but that doesn’t mean we avoid it — and this applies to screen time, sugar consumption, and high-interest loans.
In the recent Finder: Consumer Sentiment Tracker report, more than 1,850 Canadians were asked about their financial habits and plans. Despite their bad reputation, payday loans were on the list with 18% admitting to using this short-term funding in the last three months of 2022. While the majority (47%) only had to rely on a payday loan once during this time, almost a third (31%) needed to use two payday loans to get through the holiday season, another third (31%) needed to use two payday loans to get through the holiday season, another 14% used three payday loans, while 8% relied on four or more payday loans in Q4 2022.
The No. 1 reason for getting this type of short-term loan was to buy groceries (13%), followed by paying utility bills.
While payday loans can provide quick access to cash, they come with significant risks, including higher interest rates, shorter repayment periods, along with hidden fees and charges. To reduce the cost of using a payday loan and minimize the cycle of debt, Canadians need to consider when to use a short-term loan and carefully compare their options.
To learn how to compare short term loans, and find the best options, check out Finder’s guide to the best payday loans in Canada.
3 strategies to stay on budget in 2023
In a recent Finder survey, 55% of Canadians put “saving money” as their top financial goal for 2023. However, this goal could be hampered by rising debt levels. According to Equifax, the average Canadian owes $21,128 in non-mortgage debt — making debt repayment the second most popular financial goal for 2023.
To help you achieve your financial goals, you’ll need to stay on budget in 2023. Here are three strategies that can help:
(1) Track your finances and create a budget
It sounds boring, but tracking your finances and using a budget helps develop a clear picture of what you earn and how you spend. It can also help identify areas where you can save – putting that money to debt repayment or boosting your savings. If your goal is to pay off all debt, read the Finder guide on debt management or find out where to get free debt management help.
(2) Set up a dedicated savings account
Separating your savings into different accounts helps accomplish three goals: (1) Makes it harder to spend that money (most dedicated savings accounts charge a fee for withdrawals or don’t come with debit cards). (2) Clearly shows how much money you’ve set aside towards your goal – this helps motivate you to complete the goal. (3) Allows you to earn more on these savings. By choosing a high-interest savings account, you can earn two or three times more than money saved in a regular day-to-day account. To compare current offerings, check out the Finder guide on high-interest savings accounts.
(3) Pay yourself first
It’s easier to prioritize a long-term goal, like saving for retirement, if you make saving a habit. To help develop this habit, try setting up automatic deposits into a dedicated savings account. By making deposits into your savings account automatically, you remove the temptation to spend this money and solidify the habit of paying yourself first.
3 reasons why we switch banks
In the recent Finder: Consumer Sentiment Tracker report, more than 1,850 Canadians were asked about their financial decisions in 2023. Turns out a little more than 1 in 10 Canadians (11%) plan to switch banks this year. The top reason to find a new bank was to eliminate transaction fees (11.9%), while getting an account with a higher interest rate was a close second (10.5%), followed by cash back rewards (10.1%).
To find a great savings account, check out the Finder comparison of high-interest savings accounts.
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Looking for a personal loan? Check out these tips on how to find and compare personal loans, along with a list of the best personal loan options.
We updated this article on March 15, 2023 with Finder’s March Money Newsletter.