This text is part of the special Personal Finance section
Inflation and the cost of living continue to worry Canadians in 2024, with nearly a third planning to reduce their spending, according to recent surveys from TD and BMO banks. The advisors remind us of the importance of coming to consult them to be better prepared and avoid unpleasant surprises.
Senior regional director for Wealth Management at TD, Émile Khayat, thinks 2024 will be a cautious one for many Canadians. The financial stress exerted last year is expressed through their latest survey. Among those surveyed, 36% of Canadians who have been in the country for five years feel less confident about their financial prospects in 2024 compared to only 19% who say they are more confident. “People have bought more expensive things, whether it’s groceries or rent, inflation is really being felt,” he emphasizes. Not to mention the interest rates that some will have to renew this year. “These are not expenditure items that can be cut,” adds Mr. Khayat.
BMO came to the same conclusion in its survey with nearly a third of respondents seeing a reduction in their spending. But, although the majority of them set goals, 69% say they do not have a financial plan to achieve them. The end-of-year holidays have also increased financial anxiety, according to BMO Financial Group’s regional vice-president of financial planning, François Martel, who warns against social pressure. “We feel obliged to give gifts, to receive, to do as well as last year, but the situation is evolving, we must not forget it,” he notes.
Plan your finances
There is no secret, advisers say. To manage your finances well, you have to plan. This is more likely to be done by newcomers, who have clearer financial objectives in general, explains ÉmileKhayat. “When you are new to Canada, there is a little more planning, already because you consult more often to understand how the Canadian banking system works,” he explains.
If well-established Canadians consult less about their finances, it is also because it is sometimes an unpleasant diagnosis to make, according to the advisor. “For some, it’s like going to the dentist. We know it’s necessary, but we don’t really want to go,” he jokes. Those who go there, however, are more likely to have better financial health than those who do not go there, he recalls.
François Martel also takes the example of the dentist. “No one asks themselves the question whether or not they should go to the dentist every year, and it’s the same on a financial level, good financial hygiene ensures us better health in the long term,” he assures.
Stay realistic
We must not forget that even if inflation decreases, prices will not necessarily reduce, Mr. Martel also points out. “Even if interest rates drop at some point, the reality is that they will remain high. You need to have a real picture of your financial situation for tomorrow and for the years to come, but less than 40% of people consult advisors,” he regrets.
And, despite the uncertainties, restaurants are full and vacation photos from all over the world are flooding social networks. Advisors warn about the messages this sends. “On social networks we see that everyone is in Hawaii, in the South, in Europe, but no one says if it is financed on a credit card, or if people will have to stay at home in the coming months », underlines Mr. Martel.
“Some can afford it because they really have the means, but others simply haven’t calculated,” agrees Mr. Khayat. According to him, many people do not want to lower their standard of living, “there is this idea that when you acquire something, you keep it. Like when you buy a car, if you’ve gotten used to heated seats, you’ll want to keep that for the next purchase.”
Dare to ask for advice
Émile Khayat wants to demystify the image of the banking advisor who gives lessons to his clients. “We present ourselves to them as financial coaches, in the same way as a sports coach. We are in a support role, we help to plan according to personal objectives,” he explains. According to him, if a plan is put in place, the effects of inflation can remain minimal on a long-term target.
François Martel also wants to be reassuring. “When we look at our finances, we realize that happiness is much more accessible when we stay within our window. “. It’s, ultimately, like the fable of the cicada and the ant, he believes. “Sometimes you have to be a little more ant in times of uncertainty. »
This content was produced by the Special Publications team at Duty, relating to marketing. The writing of the Duty did not take part.