BMO survey: Canadian summer spending heats up

A special report from the BMO Real Financial Progress Index reveals Canadians plan to spend more on vacations and/or travel (20%), home renovations (15%), weddings for family and/or friends (10%) and special events such as graduations and showers (9%) this summer, compared to 2023.  

Household spending continues to be a primary driver of economic growth. According to BMO Economics, consumer confidence will likely improve following the Bank of Canada’s first rate cut in four years, with expectations for another two rate cuts for the rest of 2024 and several more in 2025. 

“Inflation is showing continued signs of calming, opening the door for further rate cuts by the Bank of Canada. Lower borrowing costs and slower-rising living costs should provide sufficient relief to support moderate two per cent growth in consumer spending this year and next.” 

– Sal Guatieri
Senior Economist, BMO 

The BMO Real Financial Progress Index explores Canadians’ summer spending plans and forecasts:  

• Sizzling summer travels: One in five Canadians (20%) plan to spend more on summer travel, while 38% plan on spending the same as in 2023. 15% plan on spending less than last year.  
• Overcast conditions for celebrating milestones: Nearly a tenth of Canadians plan to spend more on weddings (9%) and special events such as graduations and showers (9%) for family and friends. More than a fifth (22%) plan to spend the same on weddings for family and/or friends, and more than a quarter (27%) intend to spend the same as last year on special events.  
• Ramping up home renovations: 15% plan to spend more on home renovations, while nearly a quarter (24%) will spend the same as last year. Thirteen per cent intend to spend less on home renovations in 2024.  
• Summer splurges: Of those planning on making a large purchase, including buying a car, 18% plan to spend the same and 10% plan to spend more than they did in 2023.  
• Climbing summer camp costs: 15% of parents with children under the age of 18 plan to spend more on summer camps and/or childcare, and 36% intend to spend the same as last year.  

While many Canadians plan on spending more this summer, and 85% believe they are making real financial progress, nearly half (48%) admit they spend more than they know they should, and 15% say impulse shopping has prevented them from making financial progress. 

“Many Canadians like to make the most of the relatively short summer and look forward to spending the season travelling, celebrating milestones and making memories with friends and family. However, too much fun under the sun without a budget can lead to overspending and you may find yourself drifting away from your financial goals. Working with a professional advisor can help Canadians build a personalized financial plan that allows them to enjoy the summer while staying on track towards their goals and make real financial progress with confidence.” 

– Gayle Ramsay
Head, Everyday Banking, Segment & Customer Growth, BMO 

Treat yourself with loyalty program rewards 

As the majority of Canadians indicate that they are now more concerned about inflation (56%) and the cost of living (58%) than they were three months ago, many are redeeming rewards earned from loyalty programs to cover expenses and finance their summer spending plans.  

Over half (56%) of Canadians plan on using rewards earned from loyalty programs on grocery purchases, followed by vacations (27%), entertainment experiences including dining and tickets (20%) and paying monthly bills (17%). Redeeming reward points on grocery purchases is popular among Canadians of all ages: Gen X (61%), Boomers+ (57%), Millennials (55%) and Gen Z (49%).¹ Millennials and Gen Z are the most likely to use their points for vacations (32% for both age groups) and entertainment experiences (29% for Gen Z and 25% for Millennials).  

BMO helps Canadians keep their budgets cool for the summer 

Here are some tips to help Canadians create and maintain a personalized budget and make real financial progress: 

• Build a budget and review spending and financial statements at least once a month. A separate budget should be developed to help save for more expensive plans, such as a vacation, travel, special events or large purchases. 
• Look for recurring “hidden” expenses, such as forgotten subscriptions, and cancel those no longer needed or in use. 
• Consider redeeming points from rewards programs or loyalty programs to help purchase gifts and/or finance travel costs.  
• Seek advice from a professional financial advisor or planner to help develop a personalized financial plan according to financial goals, circumstances, obligations and time horizons.  
• Set up a savings goal and recurring savings transfers – no matter the amount – into an account, which will provide a sense of progress and motivation to achieve their goals. 

Learn more about how BMO can help customers make financial progress.