- Nearly half (48%) admit to spending more than they know they
should.
- 15% believe impulse shopping is preventing them from making
real financial progress.
TORONTO, June 18,
2024 /CNW/ - 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," said Sal
Guatieri, Senior Economist, BMO. "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."
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 intend to spend the
same as last year on special events (27%).
- Ramping Up Home Renovations: 15% plan to spend more on
home renovations, while nearly a quarter (24%) will spend the same
as last year. 13% intend to spend less on home renovations in
2024.
- Summer Splurges: For 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," said Gayle Ramsay, Head,
Everyday Banking, Segment & Customer Growth, BMO. "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."
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 3 months ago, many are redeeming rewards earned from
their loyalty programs such as Air Miles 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 and
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
BMO offers the following tips to help Canadians create and
maintain a personalized budget and make real financial
progress:
- Build a budget and regularly 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 and obligations, and time horizons.
- Set up a savings goal and recurring savings transfers into an
account – no matter the amount – which will provide a sense of
progress and motivation to achieve their savings goals.
Customers can build financial literacy, monitor financial plans,
and reach financial goals through BMO's innovative digital tools
and resources:
- BMO SmartProgress: This tool helps customers
learn more about important personal finance topics and build
financial literacy anywhere and at any time. It is a free, online
financial education platform featuring customized, interactive
content, including videos and tools, on complex financial planning
topics including budgeting and credit management, homeownership and
investing.
- BMO CreditView: Customers can quickly and easily
check their credit scores and access new tools and advice to manage
their credit profile online and on mobile.
- BMO Insights: Customers get help saving more,
monitoring spending and account values, and spotting unusual
activity with 25 BMO Insights that provide customers free, quick,
and personalized views of their daily spending to help them make
informed decisions. Popular online insights include:
- CashTrack: Using artificial intelligence, these insights
monitor customers' cash flows and let them know if they will run
out of money in the next seven days.
- Spend Categorization: These insights notify customers
when there has been a significant increase in a specific spending
category or if a free trial has expired.
- BMO Savings Amplifier Account: To help make saving easy
and automatic, BMO's new Savings Amplifier Account offers no
monthly fees, a competitive interest rate, and unlimited no-fee
transfers to other BMO accounts. In addition, its digital Savings
Goals feature enables customers to set, track, and manage their
financial goals.
To learn more about how BMO can help customers make financial
progress, visit www.bmo.com/main/personal.
About the BMO Real Financial Progress Index
Launched in February 2021, the BMO Real Financial Progress
Index is an indicator of how consumers feel about their personal
finances and whether they are making financial progress. The index
aims to spark dialogue that will help consumers reach their
financial goals and to humanize a topic that causes anxiety for
many – money.
The research detailed in this document was conducted by Ipsos
in Canada from February 28th to
March 18th, 2024. A sample
of n=2,500 adults ages 18+ in Canada were collected via
the Ipsos panel. Quotas and weighting were used to ensure the
sample's composition reflects that of the Canadian population
according to census parameters. This survey has a credibility
interval of +/- 2.4 per cent 19 times
out of 20, of what the results would have been had all Canadian
adults 18+ been surveyed.
About BMO Financial Group
BMO Financial Group is the eighth largest bank in North America by assets, with total assets of
$1.4 trillion as of April 30, 2024. Serving customers for 200 years
and counting, BMO is a diverse team of highly engaged employees
providing a broad range of personal and commercial banking, wealth
management, global markets and investment banking products and
services to 13 million customers across Canada, the United
States, and in select markets globally. Driven by a single
purpose, to Boldly Grow the Good in business and life, BMO
is committed to driving positive change in the world, and making
progress for a thriving economy, sustainable future, and inclusive
society.
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1 The
BMO Real Financial Progress Index defines Boomers+
as Canadians born 1964 or earlier, Gen X as those born between 1965
to 1980, Millennials as Canadians born between 1981 to 1996 and
Gen Z as those born between 1997 to 2012. Only Canadians
over the age of 18 were eligible to participate in the survey.
|
SOURCE BMO Financial Group