BMO Survey: Canadians Plan to Spend Less This Holiday Season

• 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 2^nd to 14^th, 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

Media Contact: Anke Suwanda, Toronto, [email protected], [phone]