A report by BMO Economics suggests a third of us plan to trim the fat in our household budgets in the year to come to grapple with financial challenges like the rising cost of living and economic uncertainty.
Ipsos surveyed over 2,500 Canadians this past fall and discovered that 30 per cent of us plan to cut back on spending, while 42 per cent have made it a New Year's resolution.
However, cutting back may be a challenge for many.
BMO Economics said while most Canadians, 68 per cent, have set financial goals, almost the same percentage do not have a plan to meet those milestones. Sixty per cent don't even have a household budget.
If you anticipate a holiday spending hangover, you're not alone. The survey found 58 per cent of Canadians used their credit cards to buy gifts. On average, it takes us three months to pay off those debts, but 24 per cent doubt they'll meet that deadline.
"It is important not to get financially carried away during the holidays," said BMO Head of Everyday Banking Gayle Ramsay. "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."
According to BMO Economics, real consumer spending didn't change much in the spring and summer of 2024. It expects it to remain flat this winter.
As for what is triggering anxiety as 2024 approaches, the survey found that 82 per cent of Canadians fear unknown expenses, while 81 per cent are concerned about their overall financial situation. Sixty-five per cent worry about family spending and 61 per cent have trouble keeping up with monthly bills.
"Relief may be on the way," said Ramsay. "Markets [are] now pricing in interest rate reductions from the Bank of Canada before the summer of 2024. [It] also helps inflation is moderating while wage growth remains strong."
Other findings from the survey include that 30 per cent of Canadians do not think they'll meet their financial goals but believe working with a financial advisor or investment firm will help. Only 40 per cent work with a financial advisor now.
The survey is considered accurate +/- 2.4 per cent 19 times out of 20.
