BMO Real Financial Progress Index: Canadians Show Signs of Increased Financial Confidence, but Sources of Anxiety Remain Real

TORONTO, Sept. 8, 2021 /CNW/ – With travel restrictions loosening and some provinces reaching their vaccination targets, Canadians are beginning to take advantage of opportunities to experience normal activities and are feeling increasingly confident that their financial situations are improving. In fact, according to BMO’s Real Financial Progress Index, nearly half of Canadians (42 per cent) feel more financially secure today than a year ago compared to half of Americans (50 per cent). However, among Americans between 18 to 34, the sense of financial security is trending down this quarter; among Canadians of the same age, it is trending up.

BMO’s Real Financial Progress Index, a quarterly measurement of consumer sentiment about money conducted by Ipsos, also found:

  • Growing Optimism: One-in-three Canadian consumers are confident they are improving their financial situation (38 per cent), compared to half of American consumers (51 per cent). Those in Toronto are significantly more optimistic about their financial position since the last quarter (42 per cent, up from 34 per cent).
  • Excess Spending: More Canadians report excess spending (49 per cent, up from 43 per cent). The largest increases in spending are by Canadians aged 25 to 35 – up from 52 per cent in April to 63 per cent – and those who are between 45 to 54 years old (up from 41 per cent to 52 per cent). More than a third of Canadians who have noted changes in behaviour report they are impulse spending, carrying more consumer debt, and overspending (38 per cent, up from 34 per cent). 
  • Financial Obstacles: When asked what was preventing them from making real financial progress, there was an uptick since the last quarter for credit card debt – from 20 per cent to 24 per cent. Canadians aged 45 to 54 saw a 12 per cent increase and those aged 55 to 64 reported a four per cent increase.
  • Goal Setting: Over two-thirds of Canadian adults continue to set financial goals (67 per cent). When setting goals, significantly more cited retirement as a goal compared to last quarter (63 per cent versus 58 per cent). Most Canadians (61 per cent) without financial goals want to put them in place; having goals breeds confidence as three in four with goals think they are on track (75 per cent).

“As Canada’s economy has opened up and provinces achieve higher vaccination rates, Canadians are feeling more confident in their financial situations – with many getting the itch to spend and some engaging in excessive spending habits,” said Gayle Ramsay, Head, Everyday Banking and Customer Growth, BMO Bank of Montreal. “Although progress has been made since the pandemic started, it’s important for Canadians to continue building on their financial foundation by evolving their financial goals and the plans they will follow to achieve them. As we continue to navigate our new normal and deal with sources of financial anxiety, BMO remains committed to supporting Canadians through their financial journeys and helping them achieve real financial progress.”

Sources of Financial Anxiety

  • Although Canadians are feeling increasingly confident that their financial situations are improving, the Index also revealed some Canadians are continuing to experience financial anxiety. The Index found:
  • Members of Gen Z are significantly more worried about their overall financial situation than they were in April (94 per cent, up 5 points).
  • Older Canadians (ages 45 to 64) are increasingly worried about specific risks, such as credit card debt or keeping up with monthly bills.
  • Canadian women are slightly more worried than men about keeping up with monthly bills (61 per cent compared to 53 per cent), housing costs (73 per cent compared to 65 per cent) and family-related expenses (68 per cent compared to 61 per cent).

BMO offers the following tips to help reduce financial stress:

  • Re-evaluate your budget: Look at your budget and see where you can make some tweaks to help you save.
  • Check on the state of your debt: Check on any debt you may be carrying and make a plan on how you are going to pay it off or when you will be debt free for the future.
  • Conduct a financial checkup: Much like the annual physical that you get at your doctor’s office, it’s a good idea to get a financial checkup on a regular basis. It’s especially smart to do a checkup during uncertain times or when your money situation may have changed.
  • Understand your credit report: Getting a better understanding of your credit is an important part of managing your finances. Not only will you get to see where you stand, you can also make sure there are no errors on your report.
  • Build up your savings/emergency fund: Try your best to put aside some money into savings each month. Having the resources to handle unexpected expenses can prevent further financial obstacles.
  • Speak with a Financial Planner: Speak with a professional to help identify financial goals and a financial plan that will outline the steps you need to take to achieve them.

To find out how BMO can help customers make financial progress, visit: https://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 July 14 to August 2, 2021. A sample of 3,321 adults ages 18+ were surveyed this wave. Quotas and weighting were employed to ensure that the sample’s composition reflects that of the Canadian population according to census parameters.

About BMO Financial Group 
Serving customers for 200 years and counting, BMO is a highly diversified financial services provider – the 8th largest bank, by assets, in North America. With total assets of $971 billion as of July 31, 2021, and a team of diverse and highly engaged employees, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets.

SOURCE BMO Financial Group

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