Many Canadians are finding themselves caught between the struggle to save money and repay their debts, says a survey from TD Bank.

And with interest rates expected to rise this summer, clearing debts probably won't get any easier.

In the report, 38 per cent of Canadians surveyed said they had no savings at all.

"I think it's worrisome," said Carrie Russell, senior vice-president of retail banking at TD Canada Trust (TSX:TD).

"The reality is that we are all going to come into unexpected expenses from time to time, be it a car or health or a job loss and this can really derail you and your family if you have no cushion behind you," Russell said from Toronto.

Russell said the major factor preventing Canadians from saving is that they are using disposable income to pay down debt, whether it be credit cards, car loans or mortgages.

She recommends a cushion of three to six months of income saved to get through unexpected financial shocks.

One-third of Canadians who responded to the recent online survey also said they didn't have enough money to cover living expenses like rent or food bills.

The survey found that 54 per cent of the 1,003 people who took part in the survey said it was a real struggle or impossible to save.

Repaying those debts will only get harder if the Bank of Canada raises interest rates this summer, as expected. A spike in Canada's inflation rate in March was driven by higher food and gasoline prices.

Shopping is also taking a toll on tucking money away for a rainy day.

Russell said 12 per cent of those surveyed said they couldn't save because "they shopped beyond their means."

Nineteen per cent of those surveyed under the age of 35 said they spent too much on shopping, she added.

"This really comes down to the age-old question of budgeting, choices and skills required in making plans for a healthy financial future."

Changing habits starts with children and making sure they understand how much things cost and understanding the difference between a "want" versus a "need," she said.

"We don't send our children into the deep end of the ocean without teaching them how to swim. We shouldn't send our children out into the workforce and independent lives without giving them the basics of financial literacy."

On the flip side, 30 per cent of respondents said they had enough money saved to cover living expenses for at least four months.

Russell said those who were most successful with savings were "paying themselves first" and using automatic savings programs to put money aside.

Certified financial planner Marta Stiteler had some tough love for Canadians without nest eggs: learn to live with less and start saving every month even if it's just $50.

"People are using the downturn as an excuse," said Stiteler, an associate at Pillar Retirement in Hamilton, Ont..

"The reality is you just have to bite the bullet and save. If you don't save you're going to spend it because your lifestyle will eat up that money," she said. "It's about discipline."

The Vanier Institute of the Family has said that average family debt in Canada hit $100,000 in 2010.

"I do think many families are behind the eight ball and the public supports really aren't there where they once were," said Katherine Scott, director of programs at the Ottawa-based organization.

Scott said local credit and non-profit agencies can provide resources to help families get a financial plan so they can "start to dig themselves out of that hole."

The online survey, based on a representative sample of Canadian adults, was conducted from Dec. 2 to Dec. 7, 2010, by Environics Research for the bank.