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More than half of Canadians under 50 spend their disposable incomes without thinking about their financial futures, suggests a study released Thursday.
The Burn Rater spending test, commissioned by Mackenzie Investments, found 24 per cent of respondents under age 50 are overspenders and 32 per cent show overspending tendencies.
The term burn rate refers to how quickly disposable income is spent. Questions included: "Have you gone shopping and/or bought things to make yourself feel better?" and "Have you spent money in your account near the end of a pay period, because you knew you were about to get paid again?"
More than half of Canadians admitted to being impulse buyers, while 37 per cent of respondents under 50 and 22 per cent of those over 50 said they have hidden purchases or told someone they paid less for an item than they actually did.
And when they're spending, almost half of Canadians use their credit cards to buy something when they don't have enough money in their bank accounts to pay for it.
Dr. Sunghwan Yi, a professor of marketing and consumer studies at the University of Guelph who helped develop the test, said people who overspend have a hard time making ends meet and trouble saving for the future.
The findings suggest younger and middle-aged people "tend to basically spend money without thinking about their financial future," Sunghwan told CBCNews.ca, adding they "don't seem to appreciate the fact that the retirement age is quickly approaching and this realization often comes as they reach the age of 50, but it's way too late.
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