The struggling economy is causing Canadians to take action with their personal finances, but far too few have a financial plan in place, according to a recent survey by BMO Financial Group.

The BMO Savings Monitor, which surveyed more than 1,500 Canadian adults in December about the financial crisis, found that nearly two-thirds of Canadians are cutting back or are adjusting their everyday spending because of the unstable economy.

More than 40% of respondents said they plan to change their current investment mix to weather the storm.

“It’s encouraging to know that people are taking time to assess the situation and adapting to protect themselves during volatile times,” said Linda Knight, president and chief operating officer of BMO Mutual Funds.

But it is concerning, Knight added, that some Canadians appear to be unfazed by the economic downturn. “They may be in denial,” she said.

In terms of RRSPs in particular, the survey found that most Canadians’ will not change their approach, but some feel they may need to be more cautious and involved.

Nearly 70% of Canadians are confident that they will not need to withdraw from their current RRSP savings in order make ends meet, and 60% say they will contribute as much to their RRSP this year as they have in the past.

But a significant 38% are not planning to contribute to their RRSP this year, as they believe they need the funds now.

Most Canadians are navigating the uncertain economic times without a roadmap, the survey found. Almost 70% of respondents admitted to not having a financial plan in place. Furthermore, 80% of respondents feel that the current economic downturn is not enough of an incentive to create a financial plan.

Another 40% of Canadians do not have emergency savings put aside in the event of a sudden change in circumstances.

According to Knigh, this is worrisome. “Having a plan in place to help make sense of it all is paramount,” she said.

IE