Other than first-year investment bankers and people trying to scam you into signing up for their financial master class on Instagram, nobody talks much about their financial situation. While that does make it easier to stay friends with anyone unironically wearing a St. Barts T-shirt, it doesn’t help you get any real perspective. And without that perspective, it’s pretty easy to start assuming everyone is doing much better than you are. That can be depressing, for one thing. But it’s also usually not true.
You could, of course, pressure your friends into uncomfortable conversations, but you may not get honest answers. Plus, people would stop inviting you to things. To help you gain financial context and still have friends, Wealthsimple hired the polling experts at Angus Reid to find a representative sample of the entire country — 2,500 people from various provinces, backgrounds, and income levels — and ask them a bunch of nosy questions about money. Then we turned their answers into interactive charts that you can play with below. Use the drop-downs to input your own stats, and you can immediately see just how well you’re doing in comparison.
The goal is not to feel better or worse than your neighbour. It’s to encourage you to keep pushing in areas you’re succeeding and to make changes wherever you might be falling behind — and, when necessary, to be a little less hard on yourself.
Here are the 11 most interesting things we learned.
Chart 1: Income
Chart 2: Credit card debt
One-third of Canadians carry a balance on their credit cards. While this is an easy trap to fall into, it’s an even more important one to get out of. With interest rates of 20% or more, credit cards increase your debt three to four times faster than most investments tend to increase your wealth. (For context, world stocks have increased by an average of 5.16% a year, after inflation, since 1900.) How do you get out of debt? Budgeting is a huge first step. Just seeing the amount of money you spend on takeout and Brat merch is often enough motivation to cut back. If you have investments in a TFSA or a non-registered account, that money will probably be more helpful to you if used to pay down your debt. You can also see if you’re eligible for a lower interest rate by taking out a line of credit with your bank. And call your credit card company. They may be able to move to a lower-rate card with fewer rewards. Some will even lower your interest rate just because you asked.
Chart 3: Mortgage balance
No surprise, the biggest cities have some of the biggest outstanding balances. Around 19% of Torontonians and 25% of Vancouverites owe $500,000 or more.
Should you try to pay down your mortgage if you have a little extra cash? That depends on a few big factors.
Your mortgage rate. Paying down your mortgage makes the most sense when your mortgage rate is higher than your expected return from investing. If you assume you’ll make 6% returns in the market (a relatively conservative estimate, given that the S&P has an average annual return 8.85% in CAD terms since 1987), your interest rate would need to be higher than 6% to make paying down your mortgage worthwhile.
How much tax-sheltered savings room you have left. The math above changes a bit if you’ve already maxed out your registered accounts. In that case, your investments are taxable, and you’re more likely to benefit from paying down your mortgage. If you’re in the top tax bracket, for example, those same 6% returns are effectively reduced to 4%.
Your timeline. If you have only a short amount of time before you need your money, investing gets riskier. A big negative swing could drastically affect your savings. But if you have more than five years to invest, you have time to ride out volatility. Even if your mortgage rate is 6% (we made an extra chart about it in this story), you still have more than 50-50 odds of earning more in the markets than you’d save making those extra mortgage payments.
Chart 4: Housing costs
Chart 5: TFSAs
A quick reminder of how TFSAs work: you don’t save any money on the contributions you make to your account, but you also don’t pay any tax on any profit you make from investing that money, no matter when you use it or what you use it for. This makes TFSAs one of the most flexible tax-advantaged accounts. You can use them to save for retirement but also for things like a new car, a boat, or a new trailer to pull your new boat behind your new car.
Chart 6: RRSPs
If you make more money now than you will in retirement, an RRSP is often your best choice for retirement savings, since it allows you to essentially defer taxes on a big chunk of your income until you’re in a much lower tax bracket. RRSPs can also have much higher contribution limits (18% of your income from the previous year, up to a maximum — $32,490 in 2024), allowing you to save more.
Chart 7: FHSAs
The newest of the registered accounts, an FHSA lets you sock away up to $40,000, tax-free, to put toward a down payment on your first home. It’s basically a hybrid of TFSAs and RRSPs, in that you get a tax deduction on any money you contribute and you’re not taxed on any gains or withdrawals. Even if you end up being a renter for life, it can still be worth opening an account. If you never find the right home for you, just roll your savings into your RRSP — without affecting your contribution room.
Chart 8: Retirement expectations
Chart 9: Retirement savings
That’s a pretty stark contrast. The good news is that, when calculating how much they need to save, many people forget to account for government pensions (OAS and CPP) or employer pensions. (StatsCan estimates that just under 40% of Canadians have some sort of private pension, but that number is falling.) Even with the help of pensions, a lot of the retirement burden falls on the retiree. That’s why registered accounts like RRSPs and TFSAs exist, and why they’re so important.
You can find a good retirement calculator to estimate the right goal for you (we get into the specific math if you want to do it yourself). Once you have that, it’s about saving and investing regularly — the earlier the better — and taking advantage of all of your registered accounts.
Chart 10: Emergency funds
If possible, you should always keep three to six months of day-to-day expenses like rent and grocery money in an interest-bearing account that you have immediate access to (that can’t-miss pig farm investment doesn’t count). After paying down credit card debt, an emergency fund should be your biggest financial priority. Otherwise you might have to go into even more debt to handle any surprises.
Chart 11: Home-buying assistance
No one loves admitting they bought their starter home with a generous loan from the Bank of Mom and Dad (or some other loving benefactor), but it’s not entirely uncommon: around a fifth of all homeowners said someone helped them with the down payment. Given the inferno-level heat of the markets in Ontario and British Columbia, you’d expect homeowners there to get the most help, but Manitoba and Saskatchewan actually take that prize.
