The BMO Real Financial Progress Index reveals that – amid growing concerns about the cost of living (54 per cent) and their overall financial situation (36 per cent) – 79 per cent of Canadians are planning to cut back on spending this holiday season, reported the bank on Thursday.
In a news release, BMO said 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 per cent plan on buying fewer gifts this year, and over a quarter (27 per cent) will cut down the number of people on their gift list.
- More than a third (36 per cent) plan on buying less expensive gifts.
- Sleighing Spending:
- 41 per cent are spending less on fewer gifts, and 44 per cent 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 per cent) admit to spending more than they know they should.
- Financial Anxiety Forecast:
- More than half (54 per cent) say thinking about holiday spending causes financial anxiety.
- 30 per cent are not confident they will be able to afford every item on their holiday shopping list.
- Unravelling Post Holiday Receipts:
- Over half (55 per cent) 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 per cent are not confident they will be able to pay off their holiday bills on time and 11 per cent 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.”
BMO said the suryey also found that while 69 per cent of Canadians feel confident in their financial situation, only 53 per cent feel they are making real financial progress and 25 per cent feel less financially secure than they did a year ago. Concerns about their overall financial situation (82 per cent), fear of unknown expenses (82 per cent), housing costs (73 per cent) and keeping up with monthly bills (64 per cent) are among the leading sources of financial anxiety.
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