TD Reports Many Continue to View Inflation and Cost of Living as Primary Financial Hurdle in 2025

January 15, 2025 TruthUSA

Nearly half of Canadians believe that inflation and the cost of living will remain their biggest financial challenge this year, as per a recent survey by TD Bank.

The survey, released on Tuesday, indicates that approximately half of the participants plan to reduce their spending, with younger Canadians more inclined to cut back compared to boomers.

Although inflation has decreased to around the Bank of Canada’s target of two percent, the cost of living continues to put a strain on household budgets.

The survey highlights that 56 percent of respondents are focusing on day-to-day expenses, while 47 percent are prioritizing saving and investing for the future. Additionally, 30 percent are focusing on paying off debt.

While the cost of living remains a top priority, the survey reveals that millennials are more inclined to prioritize debt repayment compared to boomers this year.

Despite concerns about the cost of living, the survey suggests that financial optimism has seen an improvement, with 24 percent feeling more confident about their finances in 2025.

Five consecutive interest rate cuts by the Bank of Canada by the end of 2024 have lifted financial optimism among Canadians, according to Emily Ross, TD’s vice president of everyday advice journey.

“Although the cost of living continues to be a concern for many Canadians and is once again their top financial challenge for 2025, the survey results indicate a positive shift, with Canadians feeling more optimistic about achieving their financial objectives,” said Ross in a statement.

The survey also reveals that around 61 percent of respondents do not have a financial plan for this year, and 70 percent do not utilize budgeting tools like spreadsheets or mobile apps to assist with their finances.

Ross emphasized the importance of establishing a financial plan and seeking professional guidance to help achieve financial goals such as managing daily expenses and paying off debt.

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