A survey by TD Bank Group has found that nearly half of Canadians continue to identify inflation and the cost of living as their primary financial challenge for 2025. However, concern about the issue decreased to 49% from 58% last year.
The survey also revealed growing financial confidence among Canadians, with 24% reporting feeling more optimistic about their finances this year, an increase of 4% compared to 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, vice president, 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."
When asked about financial priorities for the year ahead, 56% of respondents cited managing day-to-day expenses, followed by saving and investing for the future (47%) and paying down debt (30%).
Millennial respondents were most likely to prioritize debt repayment, with 38% identifying it as a focus compared to 21% of Baby Boomers.
The survey also explored Canadians' spending plans, with 51% of respondents stating they plan to cut back on overall spending, a decrease of 4% from the previous year. Among those not planning to reduce spending, 42% indicated they had already cut back as much as possible.
Younger Canadians, including Gen Z and Millennials, were more likely to say they had already made significant reductions, with 49% in each group sharing this view, compared to 35% of Boomers.
Among those planning to reduce spending, the most common strategies included cutting back on retail purchases, dining out or ordering food less often, shopping around for better deals, and reducing spending on entertainment.
The survey also revealed that 61% of Canadians do not have a financial plan for 2025. Additionally, 63% do not work with a financial professional, and 70% do not use budgeting tools such as spreadsheets or mobile apps.
Among those surveyed, 61% indicated having a financial New Year’s resolution. Building savings was the most common goal, followed by paying off credit card debt or other liabilities and cutting 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," Ross said.
"Our survey found that those who work with a qualified financial professional are 50% more likely to feel positive about their 2025 finances than those who do not work with one, highlighting the importance of expert advice."
TD Bank Group, the sixth largest bank in North America by assets, serves more than 27.9 million customers in various locations in financial hubs around the world.
