After another challenging financial year, a new survey from TD Bank Group has found 49 per cent of Canadians surveyed still foresee inflation/cost of living as their biggest financial challenge this year, although this is down 9 per cent from last year.
Canadians appear to be feeling somewhat more financially optimistic as they head into the new year, with 24 per cent also stating they are feeling more confident about their finances in 2025, up 4 per cent from last year, said TD in a news release on Wednesday.
“As 2024 came to a close with a fifth consecutive interest rate cut from the Bank of Canada, Canadians have responded with increased optimism,” said Emily Ross, VP, Everyday Advice Journey at TD. “Although the cost of living is still clearly a concern for many Canadians and again tops their list of financial challenges for 2025, the survey results indicate that things are moving in the right direction, and Canadians are starting to feel more positive about achieving their financial goals.”
Spending and saving decisions
The TD survey uncovered Canadians’ financial priorities in 2025, with 56 per cent of those surveyed indicating a main priority was their day-to-day expenses, down 3% from last year, saving and investing for the future (47 per cent) and paying down debt (30 per cent). Interestingly, Millennial Canadians were most likely to indicate paying down debt as a priority (38 per cent), compared to only 21 per cent of Boomers, said the report.
When it came to Canadians’ plans for spending, TD said the survey uncovered additional insights:
- Over half (51 per cent) indicated their intention to cut back on spending, overall, down 4% from last year.
- Among those not planning to, 42 per cent say it’s because they have already cut back as much as they can.
- Gen Z and Millennials (49 per cent each) are more likely to say they have cut back as much as they can, compared to Boomers (35 per cent).
“While some will avoid cutting back further out of necessity, 12 per cent of Canadians surveyed indicated they won’t be cutting back simply because they don’t want to. In contrast, among those who will cut back, 63 per cent plan to do so by making fewer retail purchases of items like clothing and electronics, 56 per cent plan to eat out or order food less often, 52 per cent say they will shop around to save more on purchases, and 41 per cent say they will spend less on entertainment like concerts and sporting events,” it said.
Planning for financial growth
“Although the survey revealed Canadians’ 2025 financial goals, it also found that 61 per cent do not have a financial plan in place for 2025. In addition, 63 per cent of Canadians surveyed do not currently work with a qualified financial professional and 70 per cent don’t use budgeting tools like spreadsheets or mobile apps to help with their finances.”
TD said Canadians’ financial ambitions were also measured in the form of resolutions, and 61 per cent noted they had a financial New Year’s resolution in mind:
- 18 per cent said it was to build up their savings as much as they are able to;
- 15 per cent said it was to pay off their credit card or pay down debt;
- 13 per cent said it was to cut back on spending.
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