Canadians in debt, but shop to feel better: BMO study

A majority of Canadians surveyed by the Bank of Montreal say they shop to cheer themselves up, and these mood-lifting impulse purchases cost Canadians $3,720 annually. The Bank of Montreal poll found that 59% of those surveyed did impulse shopping and bought items like clothes and shoes, and also treated themselves to eating out. “We’re […]

A majority of Canadians surveyed by the Bank of Montreal say they shop to cheer themselves up, and these mood-lifting impulse purchases cost Canadians $3,720 annually.

The Bank of Montreal poll found that 59% of those surveyed did impulse shopping and bought items like clothes and shoes, and also treated themselves to eating out.

“We’re really struggling to save money on a monthly basis,” said Janet Peddigrew, district vice-president of midwestern Ontario at BMO.

Consumers have been spending more than they’ve been saving over the last 10 years, which is cause for concern, Peddigrew said.

The survey found that 60% of Canadians took part in emotional shopping to cheer themselves up and 55% bought something they might not need because it was on sale.

On average, that amounts to $310 a month being spent on items that are wanted but not needed, according to the survey released on Tuesday.

Those surveyed believed they could save two-thirds of that amount if they made an effort to limit impulse spending.

The poll results come as Canadian debt-to-income ratios sit at a record 152% and top officials issue warnings to start paying down debt before interest rates rise.

There’s also an element of regret that comes with impulse shopping and in some cases, financial difficulties.

The survey found that more than half of respondents regretted their purchases and 43% sometimes spent more than they earned in a month. Another third of those surveyed had to borrow money or take out a loan to cover their impulse spending.

The consequences of impulse spending were more common among Canadians under 30, with one in three unable to afford something they needed because of spending on “wants,” the survey said.

Men said they spent more than women on average ($414 versus $207 dollars), with men tending to spend more on technology items, Peddigrew said.

BMO said its psychology of spending report is the first in a series that will examine personal finance and investing behaviours among Canadians.

The online survey was conducted by Pollara and interviewed 1,000 adults between Aug. 31 and Sept. 5. The survey has a margin of error of plus or minus 3.1%, 19 times out of 20.

Brands Articles

BMW rolls out branded content

Three well-known Toronto-based personalities showcase X models

B.C. craft brewer asks consumers to thicken the plot

Central City Brewers + Distillers introduces character-based beers from "mythical world"

Ford goes ‘back to basics’

Car company helps bloggers escape from the daily grind with recent event series

Etsy formally files for IPO worth up to $100M

Nearly 20 million people made at least one purchase through the online retailer last year

Target Canada has some explaining to do

Vendors demand answers before the retailer closes up shop in Canada in May

Subway uses wifi for giveaway

Partnership with Turnstyle Solutions provides new customer reward system

McDonald’s to start serving antibiotic-free chicken

Announcement comes as fast-food giant struggles to shake junk-food image

Metro partners with Chatelaine on multi-platform campaign

Effort will promote Metro's local foods with an emphasis on seasonal produce