The BMO Real Financial Progress Index indicates that rising living costs are leading many Americans to plan reduced spending in 2025. According to the survey, 72% of Americans intend to purchase fewer gifts this year, and nearly half (47%) are prioritizing daily expenses over holiday travel.
Paul Dilda, Head of Consumer Strategy at BMO, commented on the situation: "The holiday season is a time to reconnect with loved ones and celebrate the end of a year, but understandably many are stressed about how to balance holiday expenses with rising everyday costs." He suggests making a clear plan for tracking spending during the holidays and establishing a manageable budget for the new year.
Scott Anderson, Chief U.S. Economist at BMO, noted: "The cost-of-living battle has been two steps forward, one step back with Americans experiencing a much-needed gain in disposable personal income in the fall just to be met with an uptick in inflation over that same period."
The survey found that more than half (53%) of Americans feel financial stress regarding their holiday spending. Parents are particularly concerned, with 67% reporting anxiety over holiday costs. Additionally, 35% of parents will need at least four months to pay off their holiday debt.
Many Americans are adjusting their financial New Year's resolutions due to these concerns. More than a quarter (28%) plan to minimize spending in 2025. Dilda emphasized that "the New Year is the perfect time for anyone who is concerned about their finances to chart a path to real financial progress."
BMO offers several tips and resources for managing finances effectively. These include creating and revisiting budgets throughout the year, monitoring recurring expenses during holidays, redeeming rewards points for purchases or travel costs, seeking advice from financial advisors, and setting savings goals.
To support these efforts, BMO provides tools such as the BMO Real Financial Progress Hub and BMO Total Look for managing finances securely.
The survey was conducted by Ipsos from August 29th to September 14th, 2024, involving a sample of 3,401 adults aged 18+ in the U.S., ensuring it reflects American population demographics according to census parameters.