Albertans are feeling the pinch of the economic downturn, according to a new survey by ATB Financial.
Forty-eight per cent of those attempting to save for retirement find themselves behind their goals, according to the survey.
“That’s what I’ve been seeing. There’s been less money to invest right now because job losses are big,” said Wayne Hoffert, a certified financial planner with Hoffert Financial Services in Airdrie.
“The next couple of years don’t look that great economically. Everyone is preparing a little bit, being a little bit more cautious with spending.”
Of the respondents surveyed, 67 per cent agreed the drop in oil prices had a “strong impact” on the province’s economy, while 45 per cent said they had been affected personally. Of those, 41 per cent said they’ve had salaries frozen or reduced, and 19 per cent said they had lost their jobs.
Hoffert said developing a plan for the future was essential, even during an economic downturn.
“If (you) have a plan in place to save, stick to it,” he said.
“If you can just get through the rough times, you’ll be fine. But again, it’s discipline. It’s the same as always. People that save money and people that are good at saving money have a discipline. And they’ve got to stick to it.”
According to the survey, 61 per cent of Albertans affected by the downturn said they reduced their spending. Twenty-three per cent stopped regular savings, while 14 per cent withdrew some long-term savings and investments.
Derek Lalonde, a financial advisor with Edward Jones in Airdrie, said when it came to saving during a downturn, “the golden rule” was to pay yourself first.
“People know their budgets. They know what they can afford. If you don’t set aside money for yourself, it tends to go out (to other things),” he said.
“If things really are that tight, when you’re finding income just coming in to have those primary expenses paid for, remember this won’t last forever.
“We all know that saving a dollar today allows it to compound and grow on itself. So by saving, you can save less today to have more money in the future. The longer you wait, the more you’ll have to save in the future.”
Hoffert said getting into the habit of paying yourself first can start with a low amount of funds.
“Every month, even if it’s as low as $50 a month. At least it’s something,” he said.
“Those who don’t have much, start with something small and do your best to follow along with that discipline.”
The ATB Investor Beat survey was conducted in October 2015 and included 1,024 respondents.
