TORONTO, ONTARIO--(Marketwire - Oct 4, 2012) - According to the BMO Psychology of Spending Report, many Canadians may have the blinders on with their household spending.
The inaugural report on the spending habits of Canadians found that only one-third of Canadians (34 per cent) often set budgets for essential spending, including expenses such as housing costs, food and insurance. Furthermore, only one-in-five (22 per cent) review their essential spending on a monthly basis to determine whether they are staying on track.
Canadian households are finding it increasingly challenging to balance household finances. In fact, according to BMO Economics, Canadian household debt excluding mortgages has doubled in the past decade and consistently outruns disposable income, with the debt-to-income ratio rising from 42 per cent in early 2002 to a record high 153 per cent earlier this year.
"Proper budgeting is the cornerstone of keeping household finances in check as all aspects of the financial picture are affected by how well one manages the funds coming in and going out," said Janet Peddigrew, Vice President, BMO Bank of Montreal. "Having a budget in place is only the first step - being successful is wholly dependent on how closely you monitor it."
Ms. Peddigrew added that entering the fall season, many holidays are beginning to crop up on the calendar; and it''s important that Canadians begin planning and tracking their spending and saving ahead of the holiday season to ensure they stay on track financially. Canadians can leverage a number of personal financial management tools to achieve this, including BMO MoneyLogic™ - an online tool that enables customers to set and track spending limits and savings goals.
Regionally, the report revealed:
|Canadians with a monthly essential spending budget||31||%||40||%||31||%||27||%||38||%||32||%|
|Canadians with a monthly non-essential spending budget||17||%||22||%||17||%||14||%||17||%||15||%|
|Canadians who review essential purchases/expenses||21||%||27||%||22||%||12||%||19||%||19||%|
|Canadians who review non-essential spending/purchases||20||%||23||%||20||%||15||%||19||%||16||%|
As part of its ongoing commitment to ''Making Money Make Sense,'' BMO has introduced several tools to help Canadians stay on top of their personal finances, including BMO by Appointment, BMO MoneyLogic, BMO SmartSteps, BMO SmartSteps for Parents and BMO SmartSteps for Business.
For more information, please visit www.bmo.com.
The survey results cited in the BMO Psychology of Spending Report are from online interviews with a random sample of 1,000 Canadians 18 years of age and over, conducted by Pollara between August 31st and September 5th, 2012. A probability sample of this size would yield results accurate to ± 3.1 per cent, 19 times out of 20.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $542 billion as at July 31, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.