According to a new survey from TD Bank Group, 49% of Canadians surveyed still foresee inflation and cost of living as their biggest financial challenge this year. This is down 9% from last year.
"As 2024 came to a close with a fifth consecutive interest rate cut from the Bank of Canada, Canadians have responded with increased optimism," Emily Ross, TD’s vice-president of everyday advice journey, said in a statement.
"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."
Additionally, 24% of Canadians have stated that they are feeling more confident about their finances in 2025, up 4% from last year.
Canadians’ financial priorities
According to TD, 56% of Canadians surveyed indicated that their main priority for 2025 was their day-to-day expenses, down 3% from last year, followed by saving and investing for the future (47%) and paying down debt (30%).
Millennial Canadians were most likely to place a precedence on paying down their debt as a priority (38%), compared to only 21% of Boomers.
The survey had additional insights regarding Canadians’ spending:
- Just over half (51%) are willing to cut back on spending, down 4% from last year
- Among those not planning to, 42% say it’s because they have already cut back as much as they can
- Gen Z and Millennials (49% each) are more likely to say they have cut back as much as they can, compared to Boomers (35%)
While some Canadians will avoid limiting their spending out of pure necessity, 12% reveal they won’t be cutting back simply because they don’t want to.
For those who are willing to make a sacrifice, 63% plan to do so by making fewer retail purchases of items like clothing and electronics.
Another 56% plan to eat out or order food less often, 52% say they will shop around to save more on purchases, while 41% say they will cut back on entertainment like concerts and sporting events.
Many Canadians lack a financial plan
TD also found that 61% don’t have a financial plan in place for 2025.
What’s more, 63% of Canadians surveyed don’t currently work with a qualified financial professional and 70% don’t use budgeting tools to help with their finances.
Interestingly, 61% noted they had a financial New Year’s resolution in mind:
- 18% said it was to build up their savings as much as they are able to
- 15% said it was to pay off their credit card or pay down debt
- 13% said it was to cut back on spending
This article Inflation, cost of living still top of mind for Canadians, despite a lack of financial planning originally appeared on Money.ca
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