News Article

Poll results: Readers keeping spending in check

Posted: May 30, 2012

Knowledge Bureau Report readers who responded to May's poll question about household spending seem to be well aware of the dangers of debt and are keeping their spending in check. Of the 76 respondents to May's poll, 48% said "Yes,î they would be spending as much in 2012 as in 2011. But many of those readers noted that they had already reduced spending in the years since the 2008-2009 recession, so holding spending steady indicated adjustments previously made.

As one reader said: "We cut back a number of years ago ó so our spending habits will remain essentially unchanged!î

Of the 52% who said "No,î they would not be spending the same in 2012 as in 2011, many indicated they will be spending less in 2012. A couple of readers are happy to have big expenses behind them. Grant commented: "We built a house and had a wedding and had two kids in university in 2011. We couldn't possibly spend as much in 2012.î

But many had no such happy events to celebrate and are cutting back in order to accommodate increased costs of living. They noted the higher price of gasoline, electricity, transit, even food. They have to reduce spending in other areas so they can maintain household budgets.

Said Bill: "When the cost of the essentials of life such as food and lodging keep rising, it is hard not to increase spending, never mind keep it the same.î

And some readers couldn't help blaming governments, provincial and federal, for the current state of household finances. They noted the years of climbing government spending when household incomes saw very few gains; they pointed to programs, such as Ontario's Green Energy Act, that ended with consumers paying higher prices for electricity. One reader noted the depressing impact industrial wind turbines are having on rural property values. "For most of us, our homes are our biggest financial asset,î the reader wrote, "the sale of which, hopefully, will pay for our room and board in a seniors' facility!î

Some survey respondents, such as Bob, are cutting back their spending to avoid debt. One reader has targeted credit card debt and another admitted he is hamstrung by debt and can't afford to increase spending. And there is certainly a sense that Canada's economy has not fully recovered.

"Times are tough and going to remain so,î said a reader. "I believe it is fiscally responsible to be conservative.î

Added Lesley: "I see people taking jobs that they wouldn't have considered two years ago, which indicates to me that our economy hasn't really recovered. So, I'm going to hold on to my money to be prepared to ride it out.î

Two survey respondents noted plans to increase spending in 2012 with home renovations on the agenda. And then there is one reader whom, perhaps, we should all try to emulate. "I have no debt, no mortgage, no dependants. I've been frugal and saved all my life to become financially independent,î wrote the reader. "Now I plan to spend some ó not all ó of my inheritance while I can still enjoy it.î

Knowledge Bureau Report would like to thank readers for responding to May's poll question and sharing their comments. June's poll asks: "Should high-income earners and corporations pay higher marginal tax rates?î We look forward to your comments.