What to know
- An RBC survey found 41 per cent of Ontarians faced an unexpected emergency expense over the past year, with the average largest expense costing $6,083.
- More than half of respondents said they worry they have not saved enough, while 42 per cent fear one major expense could derail their finances.
- Rising living costs were identified as the biggest barrier preventing Ontarians from building emergency funds.
- Many Ontarians said they would rely on credit cards, family, or friends if they faced a major unexpected expense.
A new survey suggests many Ontarians are not financially prepared to handle the cost of an unexpected emergency, with more than half saying they haven’t saved enough to cover one.
The survey, released by RBC, examined how Ontarians are managing emergency savings and unexpected expenses.
Emergency expenses are common
According to the survey, 41 per cent of Ontarians experienced an unexpected emergency expense over the past year. On average, respondents said their largest emergency cost totalled $6,083.
Despite the frequency and cost of these expenses, many households lack a financial safety net.
Among households earning less than $100,000 annually, 43 per cent said they do not have an emergency fund, 11 percentage points higher than the national average.
Many worry about their financial preparedness
More than half (53 per cent) of Ontarians said they are worried they have not saved enough to deal with an emergency.
Meanwhile, 42 per cent said they are concerned that a single major unexpected expense could derail their finances.
The biggest financial concerns cited by respondents were unexpected vehicle repairs or transportation costs, major home repairs, and medical or health-related expenses.
High cost of living remains the biggest barrier
The high cost of living was by far the biggest reason respondents said they have been unable to build an emergency fund. Nearly 79 per cent of Ontarians said rising living costs have made it difficult to set money aside.
More than half (55 per cent) said they are unable to save for emergencies while also putting money toward other financial priorities.
Another 44 per cent said their finances are simply stretched too thin to make meaningful progress, while 30 per cent reported having to dip into their emergency savings to cover non-emergency expenses.
Many would turn to credit or loved ones
While 37 per cent of respondents said they would rely on an emergency fund to cover an unexpected expense, many acknowledged they would need other sources of financial support.
Nearly 34 per cent said they would use a credit card, while 17 per cent would borrow money from family or friends.
The survey also found that 22 per cent of Ontarians have never considered how they would pay for a financial emergency if one were to arise.
