A majority of Canadians (60%) say they shop to cheer themselves up and these impulse purchases cost Canadians $3,720 annually, says a BMO poll. Further, 55% buy something they might not need because it’s on sale.
Read: Consumer spending up 4% in Q2
Consumers have been spending more than they’ve been saving over the last 10 years, which is cause for concern, says Janet Peddigrew, district vice president of midwestern Ontario at BMO.
Impulse buys include clothes, shoes, and eating out. On average, $310 a month is being spent on items that are wanted but not needed. Those surveyed believed they could save two-thirds of that amount if they made an effort.
Read: Debt drags down retirement savings
Not having enough savings can leave consumers short when an emergency arises, when they need to do a major home repair or when they lose their job, says Peddigrew.
A 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.”
Read: Why some clients won’t meet their financial goals
Men said they spent more than women on average, $414 versus $207 dollars but men tended to spend more on technology items, Peddigrew adds.
Here are some articles to get your clients to budget and save.
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Help clients become debt-free faster
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