As the holiday season approaches, a recent survey has revealed that a significant majority of Canadians are planning to tighten their belts and cut back on their spending habits. The findings from the Bank of Montreal (BMO) Real Financial Progress Index showcase a collective sentiment of financial anxiety among Canadians, with many feeling uncertain about their ability to afford all the items on their holiday shopping lists.
Here are some key takeaways from the survey:
- 79% of Canadians intend to limit their holiday spending.
- 54% of respondents admitted feeling financial stress when thinking about holiday expenses.
- 30% are unsure if they can afford everything on their shopping list.
On average, Canadians are planning to spend over $1,991 during the holiday season, with the majority of the budget allocated towards travel, gifts, entertaining, decorations, and other miscellaneous expenses. Interestingly, nearly a quarter of respondents are planning to spend well over $2,000 on their holiday festivities.
Gayle Ramsay, Head of Everyday Banking Segment and Customer Growth at BMO, noted that despite affordability concerns, Canadians are finding ways to adapt their spending habits while still cherishing the holiday season. The index also highlighted that while 69% of Canadians express confidence in their financial situation, only 53% believe they are making tangible financial progress, with 25% feeling less financially secure compared to the previous year.
Economist Sal Guatieri from BMO commented on the survey results, attributing the scaled-back spending plans to rising living costs and increased unemployment rates. However, he also mentioned a silver lining with the Bank of Canada considering further interest rate reductions through the upcoming year, potentially boosting the economic outlook for the 2025 holiday season.
Following the announcement, the Bank of Canada recently made a significant interest rate cut, signaling a downward trend in policy rates for the foreseeable future. This move comes as Canada’s inflation rate dropped to 1.6% in September, aligning with analysts’ predictions for a substantial rate cut.
In conclusion, as Canadians brace themselves for a more frugal holiday season, the willingness to adapt spending habits and the reassurance of potential economic stimulus measures offer a glimmer of hope during these uncertain times. With careful budgeting and practical financial decisions, Canadians can navigate through the holiday season while maintaining financial stability and pursuing their desired festivities.
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