- 79% plan on cutting back on spending during the holiday
season
- Over half (54%) say thinking about holiday spending causes
financial anxiety
- Despite plans to scale-back their holiday spend, 63% plan on
giving back during the holiday season
TORONTO, Oct. 24,
2024 /CNW/ - The BMO Real Financial Progress
Index reveals that – amid growing concerns about the cost of
living (54%) and their overall financial situation (36%) – 79% of
Canadians are planning to cut back on spending this holiday season.
The survey's insights provide an outlook on Canadians' holiday
spending plans, including:
- The Holiday Price Tag:
- On average, Canadians plan on spending more than $1,991 this holiday season, including travel
($1,802), holiday gifts ($519), entertaining ($295), decorations ($141) and other holiday expenses ($275).
- Nearly a quarter (23%) plan on spending more than $2,000 during the holidays.
- Making a List and Checking it Twice:
- 79% plan on buying fewer gifts this year, and over a quarter
(27%) will cut down the number of people on their gift list.
- More than a third (36%) plan on buying less expensive
gifts.
- Sleighing Spending:
- 41% are spending less on fewer gifts, and 44% had cut back on
spending on other occasions, including birthdays and anniversaries,
throughout the year in order to spend more on holiday gifts.
- Nearly half (49%) admit to spending more than they know they
should.
- Financial Anxiety Forecast:
- More than half (54%) say thinking about holiday spending causes
financial anxiety.
- 30% are not confident they will be able to afford every item on
their holiday shopping list.
- Unravelling Post Holiday Receipts:
- Over half (55%) of Canadians plan on using credit cards to pay
for their holiday gifts this year and 5% plan on using
buy-now-pay-later tools.
- On average, Canadians believe it will take them three months to
pay off their holiday bills. However, 21% are not confident they
will be able to pay off their holiday bills on time and 11% are not
sure when or if they will be able to pay off these bills.
"While affordability and cost of living concerns will be top of
mind for many this holiday season, Canadians are still finding ways
to celebrate the season by reevaluating their priorities and
adapting their spending habits," said Gayle
Ramsay, Head, Everyday Banking Segment & Customer
Growth, BMO. "Ahead of holiday parties, trips and gift exchanges,
Canadians are encouraged to work with an expert to develop a
personalized plan that reflects their long-term and immediate goals
and take advantage of the convenient digital tools available to
monitor their budgets to alleviate some of the financial stress the
holidays can bring and help them make real financial progress."
"Faced with higher living costs and a rising unemployment rate,
it's no surprise that many Canadians are planning to scale back
their holiday spending plans this year," said Sal Guatieri, Senior Economist, BMO.
"Thankfully, the Bank of Canada is
also concerned about the weak economy and possibly undershooting
its inflation target and will likely continue to reduce interest
rates through next summer. This should add some cheer to the 2025
holiday shopping season."
The BMO Real Financial Progress Index also found that
while two thirds (69%) of Canadians feel confident in their
financial situation, only 53% feel they are making real financial
progress and one quarter (25%) feel less financially secure than
they did a year ago. Concerns about their overall financial
situation (82%), fear of unknown expenses (82%), housing costs
(73%) and keeping up with monthly bills (64%) are among the leading
sources of financial anxiety.
The Gift of Giving
Although current economic conditions may have affected spending
plans, the survey found many Canadians still plan on giving back
this holiday season:
- The Giving Game Plan:
- Among the 63% planning on giving back this holiday, a third
(33%) plan to contribute money and/or donate stocks, securities
and/or mutual funds to charitable causes while 17% intend to
volunteer their time. 31% have already given back throughout the
year.
- On average, Canadians plan on donating $275 this holiday season.
- Giving During Uncertainty: Despite concerns about the
cost of living, 59% say their charitable giving donations will
remain the same as previous years.
- Reason for the Season: The majority of those
planning on giving back this holiday season want to help people in
need (57%) and support the cause(s) they care about (51%). Nearly a
quarter (23%) want to teach their children and family the
importance of giving.
"Recognizing many charities and organizations are under
increased strain during these challenging times, it is encouraging
to see Canadians are planning to be generous and are making
incredible efforts to spread hope and progress in their communities
this holiday season," Lydia
Potocnik, Head, Estate Planning & Philanthropic Advisory
Services, BMO Private Wealth Canada. "For those considering gifting
their time and/or resources, working with an expert can help
develop a giving strategy that allows for more thoughtful support
towards the causes aligned with their values and can help bring
meaningful change in our communities – not only during the
holidays, but throughout the year."
There are several ways Canadians can give back this holiday
season, including:
- Donate directly: Donating cash or other assets such as
publicly-traded securities to a charity's general fund for
unrestricted use, or to a restricted fund for a specific
project.
- Donate through a will: Make a testamentary gift in a
will by giving a set dollar amount or a portion of the estate to a
charity.
- Establish a donor advised fund (DAF): DAFs offer an
immediate income tax deduction in the year of the gift and enable
the donor to distribute the funds for grant making over an extended
period of time. The BMO Charitable Giving Program is a
flexible and cost-effective DAF program that enables Canadians to
create a charitable giving plan.
'Tis the Season to Start Making Real Financial
Progress
Customers can also build financial literacy, monitor financial
plans, and reach financial goals through BMO's innovative digital
tools and resources:
- BMO Savings Amplifier Account: To help make
saving automatic and more convenient, BMO's award-winning
solution offers no monthly fees, a competitive interest rate,
and unlimited no-fee transfers to other BMO accounts. Since its
launch in 2022, there have been over one million accounts opened.
In addition, its digital Savings Goals feature enables customers to
set, track, and manage their financial goals.
- BMO SmartProgress: This tool helps customers
learn more about important personal finance topics and build
financial literacy anywhere and at any time. It is a free, online
financial education platform featuring customized, interactive
content, including videos and tools, on complex financial planning
topics including budgeting and credit management, homeownership and
investing.
- BMO CreditView: Customers can quickly and easily
check their credit scores and access new tools and advice to manage
their credit profile online and on mobile.
- BMO Insights: Customers get help saving
more, monitoring spending and account values, and spotting unusual
activity with 25 BMO Insights that provide customers free, quick,
and personalized views of their daily spending to help them make
informed decisions. Popular online insights include:
- CashTrack: Using artificial intelligence, these insights
monitor customers' cash flows and let them know if they will run
out of money in the next seven days.
- Spend Categorization: These insights notify customers
when there has been a significant increase in a specific spending
category or if a free trial has expired.
To learn more about how BMO can help customers make financial
progress, visit www.bmo.com/main/personal.
About the BMO Real Financial Progress
Index
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 September 2nd to
14th, 2024. A sample of n=3,404 adults ages 18+
in Canada were collected via the Ipsos panel. Quotas and
weighting were used to ensure the sample's composition reflects
that of the Canadian population according to census parameters.
This survey has a credibility interval of +/- 2.4 per cent 19 times out of 20, of what the results
would have been had all Canadian adults 18+ been surveyed.
About BMO Financial Group
BMO Financial Group is the
eighth largest bank in North America by assets, with total assets
of $1.4 trillion as of July 31, 2024. Serving customers for 200
years and counting, BMO is a diverse team of highly engaged
employees providing a broad range of personal and commercial
banking, wealth management, global markets and investment banking
products and services to 13 million customers across Canada, the
United States, and in select
markets globally. Driven by a single purpose, to Boldly Grow the
Good in business and life, BMO is committed to driving
positive change in the world, and making progress for a thriving
economy, sustainable future, and inclusive society.
SOURCE BMO Financial Group