Inflation prompts Canadians and Americans to cut holiday spending, yet charitable giving remains a priority

Recent surveys indicate that rising living costs and inflation are causing both Canadians and Americans to curb their holiday spending. The BMO Real Financial Progress Index reveals that 78% of Canadians and 74% of Americans plan to reduce their holiday expenditures this year. Despite these financial pressures, a significant percentage of respondents from both countries still prioritize charitable giving.

The surveys show that four out of five Canadian respondents will buy fewer gifts, with 45% planning to spend less on each gift, and 26% reducing the number of recipients on their gift list. Similarly, Americans are adopting strategies such as buying cheaper gifts (38%), making fewer large purchases (34%), and spreading purchases over time (28%).

In both countries, the financial strain is contributing to an increase in anxiety, with 51% of Canadians and 82% of Americans expressing concerns. On average, respondents anticipate it will take three months to pay off their holiday bills, with a notable percentage doubting their ability to pay post-holiday bills on time.

Despite these financial concerns, charitable giving remains a priority for many. A third (33%) of Canadians plan to maintain their level of charitable giving from previous years. In the US, 63% intend to continue contributing to charities, with younger Americans aged 18-24 showing a particularly strong inclination towards philanthropy.

These findings align with the Bank of Canada’s recent Survey of Consumer Expectations, which highlighted households’ fear of sustained inflation leading to spending cuts.

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