(NC) — Ask most Canadians and they'll tell you that money management stresses them out. They know they're carrying too much debt and too little savings, but they often lack the skills to break their bad financial habits. As a reflection of its ongoing commitment to financial education, Desjardins Group conducted an online survey of 3,000 Canadian adults to evaluate their aptitude in responsible personal financial management. The findings were then used to create the first-ever Canadian index of responsible personal finances. It's an original and comprehensive yardstick that provides a complete assessment of the public's ability to manage their personal finances, covering the two basic dimensions of knowledge and behaviour.

"The Desjardins Personal Finance Index is a unique awareness tool that provides us with an initial reading of Canadians' strengths and weaknesses when it comes to managing their finances. Since this is an unprecedented study, we're unable to compare these results to any previous survey. Nevertheless, it clearly shows that there's room for improvement and identifies the gaps. This will allow us to develop better coaching and education tools. We also hope it will lead to lasting behavioural change,” explained Monique F. Leroux, chair of the board, president and CEO of Desjardins Group.

Findings that merit concern

According to the survey results, only 50 per cent of respondents could take care of their needs and pay their bills for more than 3 months without relying on credit and 14 per cent would not last a month in cases of emergency such as job loss, accident or illness. These results are not tied exclusively to income, because only 55 per cent of households earning over $55,000 reported they could last over 3 months.

The survey also revealed that young people age 18 to 24 are lacking basic financial knowledge required to understand and take advantage of savings mechanisms. Nearly half of this group were unable to answer basic questions on real return (which takes inflation into account) and on the notion of compound interest. Even more worrying, 70 per cent of young people failed to correctly answer a simple question on investment and associated risk. Shortcomings in the area of retirement planning also came to light. Many respondents said they had no retirement savings plan at all.

Online self-evaluation tool

To help Canadians improve their financial literacy, Desjardins has developed an online self-evaluation tool that assesses an individual's personal finance management skills and suggests ways in which they can develop more responsible habits.

“Desjardins wants to help prevent financial difficulties, equip people with tools that foster responsible management of personal finances and, in particular, help them to realize their dreams. Acquiring good financial habits and setting up a financial plan are key factors that usually ensure greater financial freedom. We believe awareness is the first step in adopting new and lasting habits,” Leroux stated.

The online self-evaluation tool and the complete results of the survey are available on the Desjardins Group's Co-opme Program website at www.desjardins.com/co-opme.