Half of Canadians foresee inflation and the cost of living as biggest financial challenge in 2025, new TD survey

Inflation and the cost of living was again seen as the biggest financial challenge for Canadians, but this was down 9 per cent from last year's survey

TORONTO, Jan. 15, 2025 /CNW/ - After another challenging financial year, a new survey from TD Bank Group has found 49 per cent of Canadians surveyed still foresee inflation/cost of living as their biggest financial challenge this year, although this is down 9 per cent from last year.

Canadians appear to be feeling somewhat more financially optimistic as they head into the new year, with 24 per cent also stating they are feeling more confident about their finances in 2025, up 4 per cent 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," said Emily Ross, VP, Everyday Advice Journey at TD. "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."

Spending and saving decisions

The TD survey uncovered Canadians' financial priorities in 2025, with 56 per cent of those surveyed indicating a main priority was their day-to-day expenses, down 3% from last year, saving and investing for the future (47 per cent) and paying down debt (30 per cent). Interestingly, Millennial Canadians were most likely to indicate paying down debt as a priority (38 per cent), compared to only 21 per cent of Boomers.

When it came to Canadians' plans for spending, the survey uncovered additional insights:

• Over half (51 per cent) indicated their intention to cut back on spending, overall, down 4% from last year.
• Among those not planning to, 42 per cent say it's because they have already cut back as much as they can.
• Gen Z and Millennials (49 per cent each) are more likely to say they have cut back as much as they can, compared to Boomers (35 per cent).

While some will avoid cutting back further out of necessity, 12 per cent of Canadians surveyed indicated they won't be cutting back simply because they don't want to. In contrast, among those who will cut back, 63 per cent plan to do so by making fewer retail purchases of items like clothing and electronics, 56 per cent plan to eat out or order food less often, 52 per cent say they will shop around to save more on purchases, and 41 per cent say they will spend less on entertainment like concerts and sporting events.

Planning for financial growth

Although the survey revealed Canadians' 2025 financial goals, it also found that 61 per cent do not have a financial plan in place for 2025. In addition, 63 per cent of Canadians surveyed do not currently work with a qualified financial professional and 70 per cent don't use budgeting tools like spreadsheets or mobile apps to help with their finances.

Canadians' financial ambitions were also measured in the form of resolutions, and 61 per cent noted they had a financial New Year's resolution in mind:

• 18 per cent said it was to build up their savings as much as they are able to;
• 15 per cent said it was to pay off their credit card or pay down debt;
• 13 per cent said it was to cut back on spending.

"With a significant portion of Canadians looking to save and invest for the future, manage their daily expenses, and pay down debt, establishing a financial plan and seeking professional guidance can make a meaningful difference," added Ross. "Our survey found that those who work with a qualified financial professional are 50 per cent more likely to feel positive about their 2025 finances than those who do not work with one, highlighting the importance of expert advice."

Taking the right financial steps

As Canadians look to chart a path forward in 2025 that prioritizes their unique financial objectives, TD offers tools and resources to help customers establish financial goals, set personalized financial plans, and track their progress as they work toward achieving them.

• TD Personal Bankers are available across the country to offer financial advice and help customers with decisions around money matters, personal finances, and investments to help achieve their unique financial goals. 
• Using TD Goal Builder, a Personal Banker can provide customized investment advice to help customers work toward their financial goals, whether they're saving for retirement, a child's education, a home, or another major purchase.
• Take control of your savings and spending with the TD MySpend, the tool that gives you financial control – and confidence – right at your fingertips. Track your daily and monthly cash flow, create a wish list of savings goals and get insights to help you make these goals happen.
• The TD Ready Advice Hub has information and articles available on a variety of financial topics and investing.

About TD Bank Group

The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group ("TD" or the "Bank"). TD is the sixth largest bank in North America by assets and serves over 27.9 million customers in four key businesses operating in a number of locations in financial centres around the globe: Canadian Personal and Commercial Banking, including TD Canada Trust and TD Auto Finance Canada; U.S. Retail, including TD Bank, America's Most Convenient Bank®, TD Auto Finance U.S., TD Wealth (U.S.), and an investment in The Charles Schwab Corporation; Wealth Management and Insurance, including TD Wealth (Canada), TD Direct Investing, and TD Insurance; and Wholesale Banking, including TD Securities and TD Cowen. TD also ranks among the world's leading online financial services firms, with more than 17 million active online and mobile customers. TD had $2.06 trillion in assets on October 31, 2024. The Toronto-Dominion Bank trades under the symbol "TD" on the Toronto and New York Stock Exchanges.

About the survey

This Maru Public Opinion survey conducted on behalf of TD Bank was undertaken by the sample and data collection experts at Maru/Blue. 1,143 randomly selected Canadians adults age 25 and older who are Maru Voice Canada online panelists were surveyed from November 4^th to November 7^th 2024. The results of this study have been weighted by education, age, gender, and region (and in Quebec, language) to match the population, according to Census data. This is to ensure the sample is representative of the entire adult population of Canada. For comparison purposes, a probability sample of this size has an estimated margin of error (which measures sampling variability) of +/- 2.9%, 19 times out of 20. Discrepancies in or between totals when compared to the data tables are due to rounding.

SOURCE TD Bank Group

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