{"id":300914,"date":"2025-11-23T03:25:12","date_gmt":"2025-11-23T03:25:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/300914\/"},"modified":"2025-11-23T03:25:12","modified_gmt":"2025-11-23T03:25:12","slug":"automatic-emergency-savings-accounts-may-help-canadians-save","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/300914\/","title":{"rendered":"Automatic emergency savings accounts may help Canadians save"},"content":{"rendered":"

A new study has found very few Canadians have any emergency savings. <\/p>\n

A recent report from Western University\u2019s Financial Wellness Lab is floating the idea of automatic payroll deductions into employees\u2019 savings accounts as a way to limit financial stress and help people save for a rainy day.<\/p>\n

The \u201cBuilding Financial Resilience Through Employer-Sponsored Emergency Savings Whitepaper\u201d was authored by Canada\u2019s Financial Wellness Lab in partnership with the National Payroll Institute and CI Wealth and suggests establishing automatic emergency savings accounts<\/a>, delivered through payroll. <\/p>\n

Speaking on CTV Your Morning Ottawa on Monday, Jessica Moorhouse, a personal finance expert and author of \u201cEverything but Money\u201d, says the fact that many Canadians do not have adequate savings is concerning.<\/p>\n

\u201cWhen you don\u2019t have any emergency savings and an emergency happens\u2014your car breaks down, you lose your job, your pet gets sick\u2014where is that money going to come from? That\u2019s usually when people rely on credit,\u201d she said. \u201cFirst, they go to the credit card, which can be a really high interest rate, say 19, 20 per cent, or a line of credit. If they are lacking good credit or access to credit, they may resort to payday loans, which are the most expensive forms of credit.\u201d<\/p>\n

Moorhouse says, instead, employers can establish automatic payroll deductions that direct funds into an emergency savings account owned by the employee. <\/p>\n

\u201cThis currently is something that you, as an individual, can ask your payroll department. \u2018Can you set up a situation where you take a percentage off my payroll and make it go to one of my savings accounts?\u2019 Most people don\u2019t do this because they have no idea that they can even do this or how to set it up,\u201d she said.<\/p>\n

Instead, the white paper suggests the deductions be opt-out, rather than opt-in. <\/p>\n

Western University says financial stress doesn\u2019t end when employees clock in. <\/p>\n

\u201cFurther research from the National Payroll Institute finds over half of employees (51 per cent) admit to spending work hours worrying about money, and six per cent spend more than 90 minutes a day preoccupied with personal finances,\u201d a news release from the university says.<\/p>\n

\u201cThis distraction translates into $69.5 billion in lost productivity annually, more than double the $26.9 billion cost recorded just four years ago.\u201d <\/p>\n

Peter Tzanetakis, president and CEO of the National Payroll Institute, is quoted in Western University\u2019s release saying, \u201cEmployers need to start embracing solutions that treat the root causes of employees\u2019 stress, or they will continue to pay the price.\u201d <\/p>\n

According to the Canadian Centre for Policy Alternatives, the top 100 CEOs in Canada were paid 210 times more<\/a> than the average worker\u2019s wages in 2023.<\/p>\n

\u201cPayroll-delivered emergency savings accounts present a practical, scalable solution to strengthen both employees\u2019 financial well-being and employers\u2019 bottom lines,\u201d Tzanetakis said.<\/p>\n

The white paper proposes two levels of savings targets: <\/p>\n

A starter emergency fund equivalent to about $2,500, or half a month\u2019s income, enough to cover common financial shocks like car repairsA larger buffer, equivalent to at least four months\u2019 income, for extended disruptions or major life events, like temporary income loss<\/p>\n

\u201cIf we create a program where you\u2019re automatically enrolled, it\u2019s still your money, it\u2019s going into an account you have access to, you own it, but this is just clear behavioural finance, the pay yourself first method,\u201d said Moorhouse. \u201cIt\u2019s a really simple solution to get people to have those emergency funds they aren\u2019t currently saving.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"A new study has found very few Canadians have any emergency savings. A recent report from Western University\u2019s…\n","protected":false},"author":2,"featured_media":300915,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[712,45,49,48,133,131,132],"class_list":{"0":"post-300914","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-apple-news","9":"tag-business","10":"tag-ca","11":"tag-canada","12":"tag-finance","13":"tag-personal-finance","14":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/300914","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=300914"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/300914\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/300915"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=300914"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=300914"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=300914"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}