TORONTO, ONTARIO--(Marketwired - Jul 2, 2013) - With summer officially underway, a BMO Bank of Montreal survey released today shows one-third (34 per cent) of Canadians say they take a mental vacation from thinking about their finances during the summertime.
The report, conducted by Pollara, is part of a summer series designed to determine the spending habits of Canadians during the summer months and how they plan to make the most of their finances. Overall, Canadians expect to spend an average of $3,978 on non-essential expenses. Meanwhile, impulse spending will account for an average of $123 per week - totalling $1,599 over the course of the summer.
"While the summer months provide an opportunity for Canadians to relax and recharge their batteries, loosening up on the monitoring of household budgets can cause a ripple effect that can set many back over the long term," said Janet Peddigrew, Vice President, BMO Bank of Montreal. "Ensuring that disciplined spending and savings habits do not fall by the wayside during the summer will help Canadians avoid overextending themselves, minimize stress and keep financial goals on track."
Ms. Peddigrew added that using a personal finance tracker, such as BMO MoneyLogic - which is free for BMO customers - can make it easier to set and maintain spending and savings goals and provide immediate insights into financial behaviours over the summer months. "Keeping regular tabs on spending allows for opportunities to get back on track with your summer budget."
Other survey findings include:
- Those in Quebec are the most likely (45 per cent) to admit they take time off from their finances during the summer
- Those in the Prairies (25 per cent) and Atlantic Canada (27 per cent) are the least likely
- Men are more likely (38 per cent) than women (31 per cent) to say they take a mental vacation from thinking about money in the summertime
|Taking a mental vacation||38||%||31||%||27||%||45||%||32||%||25||%||31||%||31||%|
The survey also revealed that 17 per cent of Canadians review their financial plan less often during the summer and 13 per cent of investors say they spend less time monitoring their investments.
Serge Pépin, Vice President, Investment Strategy, BMO Asset Management notes that a potential reason for this is the historic slow down in the markets. According to a recent BMO Private Bank report, USD $1,000 invested in the Dow Jones Industrial Average exclusively from May through to October, and kept in cash the remaining months would have grown to $2,167 (0.7 per cent annualized return) from May 1, 1900 to October 31, 2012. That same amount invested exclusively during the November to April months would have grown to $122,606 (4.3 per cent annualized return) from November 1, 1900 to April 30, 2012.
However, Mr. Pépin highlights that, had this money been invested year round, the initial investment would have returned an annualized 4.7 per cent return.
"Even though life traditionally slows down during this time of the year, Canadians who are investing according to their risk profile, financial plan and have a long term time horizon, the time of year should not affect their investing habits," said Mr. Pépin. "Investors should however still continue to monitor their investments on a regular, but not necessarily on a daily basis, to ensure their investments are on track and still meeting their financial goals."
He notes that visiting a financial advisor as the new school year starts could also make sense for many.
This summer, BMO is helping Canadians make the most of their summer spending by offering up to $200 in cash when you open a chequing and savings account, and 500 bonus AIR MILES reward miles for those who sign up for a no-fee BMO AIR MILES credit card.
The survey results cited in the BMO Summer Spending Report are from online interviews with a random sample of 1,513 Canadians 18 years of age and over, conducted by Pollara between May 23 and May 27, 2013. A probability sample of this size would yield results accurate to ± 2.5 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 $555 billion as at April 30, 2013, and more than 46,000 employees, BMO Financial Group provides a broad range of personal and commercial banking, wealth management and investment banking products and solutions.