- According to a new survey from the Bank of Montreal (TSX:BMO), 79 per cent of Canadians will rein in their spending this holiday season
- On average, those surveyed intend to spend more than C$1,991 on holiday expenses such as gifts and travel
- BMO is the eighth-largest bank in North America by assets with C$1.4 trillion as of April 30, 2024
- BMO stock has added 23.03 per cent year-over-year and 31.66 per cent since 2019
According to a new survey from the Bank of Montreal (TSX:BMO), 79 per cent of Canadians will rein in their spending this holiday season.
This move towards deferred gratification stems for growing concerns about cost of living (54 per cent) and overall financial situation (82 per cent). Here’s how the numbers break down:
When it comes to overall dollar amount, Canadians intend to spend more than C$1,991 on average this holiday season, including travel (C$1,802), gifts (C$519), entertaining (C$295), decorations (C$141) and miscellaneous holiday expenses (C$275). Nearly a quarter (23 per cent) of those surveyed plan on spending more than C$2,000 during the holidays.
When it comes to the length of their Christmas lists, 79 per cent plan on buying fewer gifts this year, with 27 per cent intent on reducing the number of people on their lists. More than a third (36 per cent) plan on buying less expensive gifts.
Approximately 49 per cent of those surveyed admitted to spending more than they know they should, contributing to 54 per cent affirming that thinking about holiday spending causes financial anxiety and 30 per cent saying they aren’t confident in being able to afford everything on their gift lists.
After the torn wrapping paper has been gathered up and the tree hauled to recycling, more than half (55 per cent) of Canadians will receive a credit card bill for their holiday purchases. On average, they expect to pay it off in three months, though 21 per cent fear they will pay late and 11 per cent are unsure when or if they will be able to pay it off in full. A mere 5 per cent intend to use buy-now-pay-later plans.
The wider impact of holiday expectations is that 41 per cent of Canadians expect to spend less on fewer gifts, and 44 per cent are cutting back on spending on other milestones, including birthdays and anniversaries, to make sure they can afford the Christmas their families deserve.
Despite having to tighten their belts this holiday season, 63 per cent of Canadians plan to donate their time (17 per cent) and money (33 per cent) to causes close to their hearts, with almost a third (31 per cent) having already given back throughout the year. On average, Canadians plan to donate C$275 this holiday season, with 59 per cent maintaining their donations in line with previous years.
From a broader perspective, BMO’s Real Financial Progress Index found that 69 per cent of Canadians feel confident in their financial situation, though only 53 per cent believe they are making real financial progress and 25 per cent feel less financially secure year-over-year, driven by concerns about unknown expenses (82 per cent), housing costs (73 per cent) and keeping up with monthly bills (64 per cent).
The survey, conducted by Ipsos from Sept. 2-14, 2024, compiled responses from 3,404 Canadian adults older than 18. It 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 been surveyed.
Leadership insights
“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,” Gayle Ramsay, BMO’s head of everyday banking segment and customer growth, said in a statement. “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 at 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.”
“Recognizing many charities and organizations are under increased strain during these challenging times, it is encouraging to see Canadians are planning to be generous and are making incredible efforts to spread hope and progress in their communities this holiday season,” commented Lydia Potocnik, head of estate planning and philanthropic advisory services at BMO Private Wealth Canada. “For those considering gifting their time and/or resources, working with an expert can help develop a giving strategy that allows for more thoughtful support towards the causes aligned with their values and can help bring meaningful change in our communities – not only during the holidays, but throughout the year.”
About Bank of Montreal
BMO is the eighth-largest bank in North America by assets with C$1.4 trillion as of April 30, 2024. The bank has been operating for more than 200 years and serves more than 13 million customers across Canada, the United States and select international markets.
BMO stock (TSX:BMO) last traded at C$129.16 per share. The stock has added 23.03 per cent year-over-year and 31.66 per cent since 2019.
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