More Canadians feel their financial situation is improving says BMO

New survey finds that younger Canadians are increasingly optimistic while their US peers are less so

More Canadians feel their financial situation is improving says BMO
Steve Randall

Canadians’ financial futures are looking brighter according to a poll of consumers by BMO.

The big six bank has surveyed people to assess their financial confidence and anxiety and found that nearly half of Canadians (42%) feel more financially secure today than a year ago.

This renewed sentiment among consumers as restrictions ease and businesses re-open has been reflected in spending with 49% of Canadians reporting excess spending.

The largest spending hike is among those aged 25 to 35 (63%) and those who are between 45 to 54 years old (52%). More than a third of Canadians who have noted changes in behaviour report they are impulse spending, carrying more consumer debt, and overspending.

"As Canada's economy has opened up and provinces achieve higher vaccination rates, Canadians are feeling more confident in their financial situations – with many getting the itch to spend and some engaging in excessive spending habits," said Gayle Ramsay, Head, Everyday Banking and Customer Growth, BMO Bank of Montreal. "Although progress has been made since the pandemic started, it's important for Canadians to continue building on their financial foundation by evolving their financial goals and the plans they will follow to achieve them.”

Financial anxieties

While things are improving, BMO's Real Financial Progress Index revealed that several anxieties remain around Canadians’ finances.

Credit card debt is more likely to be a barrier to making real financial progress with 24% of people citing that compared to 20% in the previous quarter. There was a double-digit gain in the share of 45-64 year olds who said this, and this age group was also more worried about keeping up with bill payments.

Canadian women are slightly more worried than men about keeping up with monthly bills (61% vs. 53%), housing costs (73% vs. 65%) and family-related expenses (68% vs. 61%).

Gen Zs are significantly more worried about their overall financial situation than they were in April (94%, up 5 points).

Over two-thirds of Canadian adults continue to set financial goals with significantly more citing retirement as a goal compared to last quarter (63% vs. 58%). Most people (61%) without financial goals want to put them in place; having goals breeds confidence as three in four with goals think they are on track (75%).