Most Canadians also do not have a financial plan or a household budget for the upcoming year, survey finds
The cost-of-living crisis and economic uncertainty made almost a third of Canadians plan to cut back on their spending in the upcoming year, according to the BMO Real Financial Progress Index, a report released by BMO Financial Group.
The report found that 30% of Canadians will be cutting back on their spending for 2024. About 42% of Canadians were planning to change their New Year’s resolutions for their finances such as creating financial goals with 17% intending to also make a budget for 2024. Notably, 44% did not make any financial New Year’s resolutions.
Also exploring the effect of spending concerns and economic conditions on Canadian’s worries about their finances and their financial planning approach, the report found that 58% were planning to use credit cards to pay for their holiday gifts.
“While many Canadians are looking forward to celebrating with family and loved ones, it is important not to get financially carried away during the holidays,” said Gayle Ramsey, head, everyday banking, segment & customer growth, BMO.
While Canadians believed that it would take them three months to pay back their holiday purchases, about 24% were not confident that they will be able to pay them off on time.
The report also found that the leading sources for Canadians’ financial anxieties were the fear of unknown expenses (82%), concerns about their overall financial situation (81%), family-related expenses (65%), and keeping up with monthly bills (61%).
About 68% of the respondents also said they have set financial goals which included retirement planning (59%), saving for a vacation (46%), paying down debt (39%), and saving for a large purchase (36%). However, there was a notable 69% of Canadians who did not have a financial plan while 60% did not have a household budget for 2024
"As many look forward to a fresh start in the new year, we want to empower Canadians to make real financial progress by encouraging them to get a head start on defining their financial goals, take advantage of online banking tools to conveniently set and monitor budgets, and work with a financial advisor to help build a plan and establish good financial habits,” said Ramsay.
The BMO Real Financial Progress Index is an indicator of consumers’ perspectives regarding their personal finances and if they are making any financial progress. To gather the data, 2,502 adults were surveyed by Ipsos, a market researcher.
