Almost half of Canadians reported a decrease in savings due to rising costs.

Postteile: Canadians are losing confidence in their personal finances

23% of Canadians feel less secure about their finances compared to last year

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Canadians are beginning to lose confidence in their personal finances after more than a year of steady optimism. according to the Bank of Montreal’s quarterly Real Financial Progress Index.

The index found that nearly a quarter (23 percent) of Canadians feel less confident about their finances compared to last year. That’s an increase of 18 percent just three months ago.

Most point to the impact of rising inflation on their personal finances.

A majority (61 percent) of consumers said the country’s inflation rate, which hit a new 31-year high of 6.8 percent in April, has had a significant impact on their finances.

“The fastest and most widespread inflation in three decades is forcing Canadian households not only to cut back on necessities like vacations, but also to change how they buy necessities — especially groceries,” Sal Guatieri, BMO’s senior economist, said in a press release.

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Almost half of Canadians (49 percent) reported a decrease in savings due to rising costs.

Housing is still the biggest obstacle for many (37 percent). But monthly bills (up four points to 30 percent) and credit card debt (up two points to 23 percent) are also keeping more Canadians from getting ahead financially than they did last quarter.

The index found that younger generations are particularly vulnerable to reducing their savings. Millennials (62 percent) and Gen Z (56 percent) were the most likely to reduce their savings compared to older generations.

Most (81 percent) Canadians plan to adjust their lifestyle in response to the price jump.

More than half (52 percent) of consumers are tailoring their grocery shopping by buying only the essentials and choosing cheaper alternatives to brand names. Another 52 percent said they eat out less or intentionally shop less when eating out.

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Many (34 percent) drive less to offset rising gas prices. Others (29 percent) cut spending on vacations or cut them out altogether. Some (23 percent) are even canceling their gym and cable subscriptions to cut costs.

However, Canadians seem to prioritize their retirement savings. The index found that a majority are more likely to cut their general savings (36 percent) than their pension contributions (22 percent).

“As the cost of everyday purchases, from groceries to gas, continues to rise across the country, it’s important for consumers to review and adjust their financial plan,” said Gayle Ramsay, head of daily banking and customer growth at BMO, in the press release . “Now is a good time to seek advice from a financial professional on how to navigate this period of high inflation, be prepared for unexpected setbacks and ensure you are on track to reach your financial goals, be it when saving for a down payment or retirement planning.”

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The BMO report recommends postponing large purchases where price increases could be temporary as an additional measure to combat inflation.

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FROM SALESMAN TO CEO Aritzia Inc. founder Brian Hill initially turned down Jennifer Wong’s application to become a salesperson 35 years ago. Now he has given her the keys to the company. “Don’t take no for an answer,” she says. Financial Post’s Joe O’Conner has the full story. Photo by Aritzia

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  • Gudie Hutchings, Secretary of State for Rural Economic Development, and Rene Arseneault, MP for Madawaska-Restigouche, make an announcement to improve high-speed Internet access in New Brunswick
  • Quebec Professional Association of Real Estate Brokers publishes home sales figures in Montreal and Quebec City
  • Carla Qualtrough, Secretary of State for Employment, Human Resources and Disability Inclusion, highlights government investment in accessibility and disability inclusion in communities and workplaces
  • François-Philippe Champagne, Minister for Innovation, Science and Industry, will announce a federal investment under the third phase of the CanCode program
  • DP foreign policy critic Heather McPherson and House Speaker Peter Julian will join Gaia Amazonas and her Indigenous partners in the Colombian Amazon rainforest to discuss proposals to improve accountability for Canadian companies at home and abroad
  • Prime Minister Justin Trudeau speaks virtually at the annual Federation of Canadian Municipalities Conference and Expo
  • The Toronto Regional Real Estate Board releases May home sales numbers
  • Transport Minister Omar Alghabra and local MPs will make a funding announcement for Rail Safety Improvement Program projects that will improve the safety of Canada’s railroads
  • International Development Secretary Harjit Sajjan provides details of funding being made available to support clean technology innovation in BC’s natural resource sectors
  • Data from today: Canadian Labor Productivity, US Employment Report and ISM Services PMI
  • Merits: North Bud Farms Inc., BRP Inc.

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US office occupancy has tended to level off in recent months rather than return to pre-Omicron levels. As of May 25, the 10-city average was just 43 percent for the same week in 2019, according to data from Kastle. “The trend speaks volumes for the impact that hybrid work is having on occupancy,” wrote Erik Johnson, the bank’s economist of Montreal, in a note. “It’s clear that hybrid work isn’t just about health concerns, it’s an enduring preference on the part of workers.”

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Price levels continue to rise at a rate not seen in decades – and rising inflation is having a serious impact on your cash savings. Fortunately, investment legend Warren Buffett has plenty of advice on what to own when consumer prices are rising. Our content partner MoneyWise has the details.

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Today’s post was written by Noella Ovid, with additional coverage from The Canadian Press, Thomson Reuters and Bloomberg.

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