Canada NewsWire
TORONTO, Dec. 15, 2022
TORONTO, Dec. 15, 2022 /CNW/ - The latest BMO Real Financial Progress Index finds 77 per cent of Canadians say inflation is impacting their holiday spending decisions. Overall financial confidence significantly dropped, with 69 per cent of Canadian adults feeling confident compared to 75 per cent a year ago.
As Canadians continue to feel the pinch of inflation on their finances, they are turning to a variety of spending changes to offset the impact of the current economic climate this holiday season. BMO's survey found that:
This holiday season, 41 per cent of Canadians plan on travelling domestically, with 21 per cent now planning to spend less on travel due to inflation. Just over one third of Canadians (35 per cent) plan to travel internationally over the holidays with 18 per cent saying they now plan to spend less.
What's more, 42 per cent plan to modify or push back major purchases that they were planning to make this year including the 63 per cent of Canadians who no longer intend to move forward on large purchases such as buying a car or home. Younger Canadians (age 18-34) report being more likely to rely on their savings, debit cards and buy now, pay later (BNPL) programs to pay for this year's holiday gifts.
A large majority of Canadians (82 per cent) say their financial situation is causing them increased anxiety. The most significant sources of financial anxiety, according to the survey, include housing costs (71 per cent), fear of unknown expenses (84 per cent), and family-related expenses (68 per cent).
In addition to the top causes of financial anxiety, Canadians also report:
"The impact of inflation on Canadians' finances is having a direct impact on how people shop this holiday season," said Gayle Ramsay, Head, Every Day of Banking, Segments & Customer Growth, BMO. "In addition to setting and following a holiday budget this year, it is crucial for Canadians to create a financial plan for 2023. As we head into the new year, a key to alleviating financial anxiety will be learning how to protect financial progress you have made already, and how to continue making progress through a challenging economy."
Looking ahead to the new year, nearly half (43 per cent) of Canadians say their financial New Year's resolutions have changed because of inflation – with 60 per cent of younger Canadians aged 25-34 reporting their resolutions have changed compared to just 22 per cent of those over the age of 65.
"Given the highest inflation in four decades and the fastest interest rate increases in three decades, it's not surprising that Canadian families, especially younger ones, are feeling substantial strain on their finances and well-being," said Sal Guatieri, Senior Economist, BMO. "The relatively good news is that policy rates are expected to stabilize in 2023 as inflation slows, setting the stage for potentially lower borrowing costs in 2024."
BMO offers the following tips to help Canadians make real financial progress and navigate the inflation as the new year approaches:
To find out how BMO can help customers make financial progress, visit: www.bmo.com
Launched in February 2021, the BMO Real Financial Progress Index is an indicator of how consumers feel about their personal finances and whether they are making financial progress. The index aims to spark dialogue that will help consumers reach their financial goals and to humanize a topic that causes anxiety for many – money. The research detailed in this document was conducted by Ipsos in Canada from October 24 to November 28, 2022. A sample of a sample of n=3,400 adults ages 18+ in Canada were collected. Quotas and weighting were used to ensure the sample's composition reflects that of the Canadian population according to census parameters.
Serving customers for 200 years and counting, BMO is a highly diversified financial services provider - the 8th largest bank, by assets, in North America. With total assets of $1.14 trillion as of October 31, 2022, and a team of diverse and highly engaged employees, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets.
SOURCE BMO Financial Group
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