TORONTO — Almost half of Canadians say inflation and the cost of living will continue to be the biggest financial challenge they face this year, according to a new survey from TD Bank.
The survey released Wednesday shows about half of the respondents plan on cutting down on spending with younger Canadians more likely to cut back on spending compared with boomers.
Inflation has fallen back to around the Bank of Canada's two per cent target, but the cost of living is still straining household budgets.
Among the priorities, the survey shows 56 per cent of the respondents are focused on their day-to-day expenses, while 47 per cent are planning to prioritize saving and investing for the future. It added 30 per cent of Canadians are prioritizing paying down debt.
While priorities remain focused on the cost of living, the survey showed millennials are more likely to prioritize debt repayment this year compared with the boomers.
Despite the ongoing concerns about the cost of living, the survey says financial optimism has improved, with 24 per cent saying they feel more confident about their finances in 2025.
Five consecutive Bank of Canada interest rate cuts by the end of 2024 have increased financial optimism among Canadians, Emily Ross, vice-president of everyday advice journey at TD, said.
"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," Ross said in a statement.
The survey also showed about 61 per cent do not have a financial plan in place for this year and 70 per cent don't use budgeting tools like spreadsheets and mobile apps to help with their finances.
Ross said establishing a financial plan and seeking professional guidance could make a difference in reaching financial goals such as managing daily expenses and paying down debt.
This report by The Canadian Press was first published Jan. 15, 2025.
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