For many Canadians, putting money toward home renovations is coming at the expense of debt repayment and retirement savings, according to the results of a recent IPSOS survey conducted on behalf of BDO Canada Ltd.
In fact, the survey found that about one-quarter of adult homeowners say they will forgo paying off debt in order to finish home renovations this summer while another 25% report they will sacrifice building emergency savings and 21% will put retirement savings on hold.
Furthermore, if the costs related to these renovations are more than expected, almost half of survey participants say they will transfer money from their savings accounts to cover the cost.
As well, 15% reported they would accumulate more debt if it meant they could finish their home-renovation projects. The report suggests that homeowners who depend on debt expect repayment to take approximately two-and-a-half years.
“Ideally, you want to avoid carrying a large debt balance over several months. With interest charges adding up each month, you could be paying back much more than you originally spent,” says Doug Jones, president of BDO Canada, in a statement.
“We would suggest that Canadians focus on saving for retirement and reducing their existing debt rather than take on more debt for home renovations.”
However, it doesn’t look like Canadians will be scaling back on home renovations anytime soon as 57% of homeowners surveyed across Canada said they have plans to renovate their homes as soon as next year.
These numbers are even higher in Quebec and Ontario, with 72% and 61% planning to renovate, respectively.
Canadians report the cost of these renovations, on average, to total $16,439.
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