Debt freedom is increasingly a top priority for many Canadian homeowners and more plan to set a budget for this coming holiday season to try to keep their debts under control, according to an online poll of more than 1,000 Canadians.

“More Canadians in this survey are saying ‘debt freedom’ is their goal and, compared to last year, more are planning to set limits on holiday spending,” says Doug Conick, president and CEO of Manulife Bank of Canada.

Fully 76% of those surveyed identify “debt-freedom” as a high financial priority, up from 69% in two previous surveys by the bank in the past year.

The poll for Manulife Bank of Canada was conducted by Research House in mid-November.

Also, 70% of homeowners in the survey said they’ll set a spending budget for holiday spending, compared to only 56% who said they set a similar budget last year.

Interestingly, setting a budget is by no means a guarantee that homeowners will stay out of spending trouble this holiday season. Of those who set a budget last year, only 43% said they actually stuck to that budget, while the remainder wound up spending more than they’d planned.

“While setting a holiday spending budget is a good first step, consumers must commit to sticking to that budget,” says Peter Bocking with HMA and Bocking Financial Solutions in Whitby, Ontario.

Of those who plan to set a budget for this holiday season, only 40% state they’ll definitely stick to that budget. The remaining 60%, perhaps letting themselves off the hook before shopping season even begins, state that they might end up spending more than they’ve planned.

Debt free target

Similar to previous surveys, just under a third (30%) of respondents rated debt-freedom 10 out of 10 — their top financial priority.

Another 46% ranked it as a nine or eight on the 10-point scale.

The lack of a commitment to holiday spending limits may be one reason that Canadian homeowners continue to struggle to reduce their debt. Only about half of homeowners surveyed (49%) say they have less debt than 12 months ago.

While this is a slight increase from last summer, when 44% reported some cut in their year-over-year debt, there remains significant room for improvement. In fact, only 29% of homeowners in this group met or exceeded their debt-reduction expectations. The other 20% saw some debt-reduction, but less than planned.

“People stand a better chance of reaching their goals if they work with a financial advisor and have a plan in place,” Conick explains.

“Often homeowners don’t have either the time or expertise to learn about the best options available to them, so they miss opportunities to reduce their debts,” he said. “More advisors are stepping into the breech to help their clients not only manage their debt, but also build debt management into their overall financial plans.”

The Manulife Bank of Canada poll surveyed 1,010 Canadian homeowners between ages 30 to 55 with household income of more than $50,000. It was conducted online by Research House from November 2 – 10. The bank is a wholly owned subsidiary of Manulife Financial Corp. (TSX:MFC).

IE