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Posthaste: Canadians cutting back to cope with inflation, but say some sacrifices go too far Back to video

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Most Canadians are making daily sacrifices to cope with the rising cost of living, but very few are planning to delay major life events, according to a new survey by the Canadian Imperial Bank of Commerce.

The study, which interviewed 1,510 adults, found that 61 per cent have adopted some sort of cost-cutting behaviour. Nearly half (46 per cent) have cut back on non-essential spending such as entertainment and dining at restaurants, while another 43 per cent have reduced their day-to-day spending by buying cheaper items and couponing.

But almost all Canadians are holding onto big ambitions, even in the face of higher costs, with very few willing to postpone getting married (two per cent), buying a first home (six per cent) or having a child (two per cent).

“As life gets more expensive, the choices we make carry more weight,” Carissa Lucreziano, vice-president of financial and investment advice at CIBC, said in a press release. “It can be tricky to keep your bigger ambitions on track in a challenging environment, but it is possible.”

More than half of Canadians (61 per cent) are concerned about planning and meeting future goals or saving money for their long-term needs (63 per cent). Yet, only 15 per cent are delaying home renovations and 20 per cent are postponing taking a vacation next year.

“Nobody wants to give up a family vacation or postpone a home renovation, so it’s important to align your expectations to the reality of your budget so you can make compromises and continue to work on your goals,” Lucreziano said.

For many, recession fears are adding to the worries, with 30 per cent believing we are heading into a recession and a quarter believing we are already in one.

Meanwhile, many Canadians’ financial flexibility is disappearing as rising costs continue to drain their savings, finds a separate survey by the Royal Bank of Canada.

The poll, which interviewed 1,508 adults, found that over three-quarters of Canadians (77 per cent) want to save more money but can’t because of increased costs. That’s leading to fears of falling behind and 64 per cent are concerned about that happening this year, while 48 per cent say they’ve never been more stressed out about money.

“When we add on that more than one-third of Canadians don’t have an emergency fund, we’re seeing financial flexibility disappearing for many across the country,” Craig Bannon, director of regional financial planning support at RBC, said in a press release.

Canadians are also anxious about the effect inflation could have on their financial future if it continues into 2024. Most (67 per cent) are worried they won’t have enough money to cover unexpected costs or ongoing expenses, while 72 per cent of those with debt are concerned about taking on more debt. Others are worried it will take longer to retire (39 per cent) or that they will need to come out of retirement (21 per cent).

“This is why it’s so important to have a financial plan in place — one that gives you the flexibility to adjust along the way, as your needs change,” Bannon said.

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Today’s Posthaste was written by Noella Ovid, with additional reporting from The Canadian Press, Thomson Reuters and Bloomberg.

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