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Madison, WI 53707-7970
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Vol.
7 #4, March 2008
Canadians Becoming Big Spenders
 Many
Canadians, especially under the age of 50, are taking on spending
behaviors similar to their neighbors in the United States, according to
the recent "Burn Rater" Spending Test commissioned by Mackenzie
Investments. An individual’s “burn rate” refers
to how quickly a person spends his or her disposable income.
The test asked ten questions to gauge Canadians' spending and saving
behavior. The results found 56 percent of all Canadians less than
50 years of age demonstrate troubling “Overspending
Tendencies” (32 percent), or are outright
“Overspenders” (24 percent). The younger the
Canadian, the worse the spending habits. Twenty-nine percent of
Canadians under 34 answered yes to 7-10 questions on the Burn Rater
Spending Test, compared to just 5 percent of those 50-plus. The
test also revealed that over half (53 percent) of those under 50 have
used their credit card to buy something when they didn’t have
enough money in their bank account to pay for it, and 47 percent admit
they have bought things they wanted without considering the longer-term
impact of the cost on their personal finances.
“This study shows that younger Canadians are spending first and
asking questions later,” says Dr. Sunghwan Yi, a University of
Guelph researcher and expert in consumer behavior, who helped develop
the test with Mackenzie. “There is less social disapproval around
spending money on impulse and more credit to support over-spending.
This leads to a ‘spending is good, saving is less
important’ attitude.” The study also found that
people in the Atlantic Provinces, at 60 percent, are more likely to
make spur-of-the-moment purchases than Quebecers, who are the least
likely at 43 percent.
More information on the study can be found on the Mackenzie Investments website. You can take the Burn Rater Spending Test yourself at http://www.burnrate.ca/.
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