Canadians' top financial priority: cutting debt

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According to Statistics Canada, the debt-to-disposable income ratio in Canada was 165.3 percent for the first three months of 2016 (photo: ThinkStock).

Almost one third (30 per cent) of Canadians says their single most important financial priority is to reduce or eliminate debt, according to a new report.

BMO Wealth Management, a unit of BMO Financial Group, discloses this finding “The Personal Balance Sheet.” The study examines how Canadians adapt financially as they move through different life stages, balancing saving, investing, borrowing and spending to reach their financial goals.

Related: A study in contrasts: financial outlook of boomers vs. Gen Xers

According to Statistics Canada, the debt-to-disposable income ratio was 165.3 per cent for the first three months of 2016. This is the amount Canadians owe for every after-tax dollar they earn, that is $1.65 for every dollar earned.

The BMO report found Canadians’ other financial priorities include:

Priorities shifted depending on the age of respondents. While the most important priority for boomers (those aged 35-54) is to reduce or eliminate debt (34 percent), the number one priority for millennials (those aged 18-34) is saving more (26 percent). Canadians aged 55 and over prioritize effective investing and tax efficiency (29 per cent).

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Canadians' top financial priority: cutting debt