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Nearly half of consumers plan on changing their financial New Year’s resolutions – BMO Survey 

December 11, 2023 | Customers

A special report from the BMO Real Financial Progress Index reveals nearly a third (30 per cent) of Canadians plan to cut back on spending for 2024 amid growing concerns about the cost of living and economic uncertainty. 

Given concerns about the rising cost of living, 42 per cent of Canadians plan on changing their financial New Year’s resolutions, including creating financial goals and/or a budget for 2024 (17 per cent). As many as 44 per cent of Canadians do not make financial New Year’s resolutions. 

The special report explores how concerns about spending and economic conditions have affected Canadians’ financial anxieties and approaches to financial planning ahead of the new year:  

  • The background on holiday bills:  
    • Over half (58 per cent) plan on using credit cards to pay for their holiday gifts.  
    • On average, Canadians believe it will take three months to pay back their holiday bills and 24 per cent are not confident they will be able to pay off their post-holiday bills on time. 
  • Financial anxiety analysis: The leading sources of financial anxiety are fear of unknown expenses (82 per cent), concerns about their overall financial situation (81 per cent), family-related expenses (65 per cent) and keeping up with monthly bills (61 per cent). 
  • Framing financial goals: The majority (68 per cent) of Canadians have set financial goals for themselves, including retirement planning (59 per cent), saving for a vacation (46 per cent), paying down debt (39 per cent) and saving for a large purchase such as a car, large appliance, etc. (36 per cent).  
  • Planning prognosis: While most Canadians have financial goals, the majority do not have a financial plan (69 per cent) and/or a household budget for the year (60 per cent). 

“While many Canadians are looking forward to celebrating with family and loved ones, it is important not to get financially carried away during the holidays. As many look forward to a fresh start in the new year, we want to empower Canadians to make real financial progress by encouraging them to get a head start on defining their financial goals.”

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

Plans to establish good financial habits in 2024 come as Canadians reevaluate their holiday spending amid concerns about the high cost of living and the economy. According to BMO Economics, Canadian real consumer spending was little changed in the spring and summer of 2023, and will likely remain flat this winter, as households deal with rising debt payments and ongoing anxiety about the economic outlook. However, relief may be on the way, with markets now pricing in interest rate reductions from the Bank of Canada before the summer of 2024. Also helping is that inflation is moderating while wage growth remains strong.  

The survey also reveals nearly a third (30 per cent) of Canadians do not believe they are on track to meet their financials goals. While many Canadians believe a financial advisor either from their bank (58 per cent) or investment firm (48 per cent) are important in helping them reach their financial goals, only 40 per cent work with a financial advisor. 

To learn more about how BMO helps customers make financial progress, visit www.bmo.com/main/personal.

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