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Canadians Brace for Financial Challenges as Inflation Concerns Persist

Concerned Canadian family discussing finances at the table.

A recent survey by TD Bank Group reveals that nearly half of Canadians view inflation and the rising cost of living as their primary financial challenge for 2025. This sentiment, while still significant, marks a 9% decrease from the previous year, indicating a slight shift in financial optimism among the populace.

Key Takeaways

  • 49% of Canadians identify inflation and cost of living as their biggest financial challenge in 2025.
  • 24% of respondents feel more confident about their finances compared to last year.
  • 61% of Canadians lack a financial plan for the upcoming year.

Financial Sentiment in Canada

The survey, conducted in late 2024, shows that despite ongoing concerns about inflation, Canadians are beginning to feel a bit more optimistic about their financial futures. Emily Ross, VP of Everyday Advice Journey at TD, noted that the recent interest rate cuts by the Bank of Canada have contributed to this newfound optimism.

Spending and Saving Priorities

The survey also highlighted Canadians’ financial priorities for 2025:

  • Day-to-Day Expenses: 56% of respondents prioritize managing their daily expenses.
  • Saving and Investing: 47% aim to save and invest for the future.
  • Debt Repayment: 30% focus on paying down debt, with Millennials leading this charge at 38%.

Interestingly, over half (51%) of Canadians plan to cut back on spending, although this is a slight decrease from last year. Among those who are not planning to cut back, 42% feel they have already reduced their spending as much as possible.

Financial Planning and Goals

Despite the challenges, many Canadians are setting financial goals for the new year. The survey found that:

  • 61% of respondents have a financial New Year’s resolution.
  • 18% aim to build their savings.
  • 15% plan to pay off credit card debt.
  • 13% intend to cut back on spending.

However, a concerning 61% of Canadians do not have a financial plan in place for 2025, and 63% do not work with a financial professional. This lack of planning could hinder their ability to achieve their financial goals.

The Importance of Financial Guidance

The survey underscores the value of seeking professional financial advice. Canadians who work with a qualified financial professional are 50% more likely to feel positive about their financial situation in 2025 compared to those who do not.

Tools for Financial Success

To assist Canadians in navigating their financial journeys, TD Bank offers various resources:

  • Personal Bankers: Available nationwide to provide tailored financial advice.
  • TD Goal Builder: A tool for customized investment advice to help achieve specific financial goals.
  • TD MySpend: An app that helps track spending and savings, providing insights for better financial management.
  • TD Ready Advice Hub: A resource for information on various financial topics and investing.

As Canadians prepare for the financial landscape of 2025, the emphasis on budgeting, saving, and seeking professional advice will be crucial in overcoming the challenges posed by inflation and the cost of living.

Sources

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