Canadians Struggle to Curb Unconscious Spending Habits Amid Rising Cost of Living

• Unchanged unconscious spending habits eating into Canadians' wallets, with half (51%) concerned about current financial state
• Credit cards for payments, monthly subscriptions and buying additional items for "perks" top sources of more frequent unconscious spending
• Canadians 18-34 are the most likely to charge monthly subscriptions directly to credit cards compared to six months ago, yet are among the most concerned about their finances

TORONTO, Nov. 17, 2022 /CNW/ - A new consumer survey, The Quiet Spend, conducted by FP Canada™ among members of the online Angus Reid Forum, explores an often-hidden element of day-to-day purchases – unconscious spending. Released today, the survey found that, on a regular basis, many Canadians' dollars are going towards unconscious spending – purchases that are made out of convenience or habit rather than with an eye on budgets and long-term financial plans.

According to The Quiet Spend, half (51%) of Canadians are concerned about their current financial situation, but the majority have not changed their unconscious spending habits compared to six months ago, such as charging monthly subscriptions to credit cards (64%) or using their credit card to make payments (59%).

While some Canadians dialed back spending in certain areas, other types of unconscious spending increased. Using a credit card to make payments (28% more often, versus only 13% less often), charging monthly subscriptions directly to credit cards (21% more often, versus 14% less often) and adding additional items to get a "perk", like free shipping (25% more often, versus 20% less often) were commonly cited areas of increased frequency.

Unconscious Spending Type	More Frequently	About the Same	Less Frequently
Using a credit card to make payments	28 %	59 %	13 %
Picking up additional items at in-store or online checkouts	16 %	53 %	30 %
Buying more than intended during sales	25 %	48 %	28 %
Charging monthly subscriptions directly to credit cards	21 %	64 %	14 %
Adding additional items to get a "perk", like free shipping	25 %	54 %	20 %
Purchasing items through a "buy now, pay later" plan	19 %	41 %	40 %

"With the rising cost of living, Canadians' dollars simply aren't going as far as they once did. Now more than ever, it's critical for Canadians to be mindful of their spending habits," said Tashia Batstone, President & CEO of FP Canada. "Unconscious spending is only one piece of the puzzle when it comes to Canadians' complex financial situations, and working with a professional financial planner can help Canadians better understand their overall financial picture. From identifying spends they didn't know about and setting budgets that work for them today so tomorrow can be a little easier, to providing a second opinion or simply letting them know there's someone in their corner, professional financial planners can be great advocates for Canadians in difficult times."

Unconscious spending a common, coast-to-coast-to-coast trend

Across the country, charging monthly subscriptions to credit cards continued to be the most frequently cited type of unconscious spending to have remained the same over the past six months, with Atlantic Canada (68%), Saskatchewan and Manitoba (68%), Ontario (65%), Alberta (64%) and British Columbia (62%) indicating unchanged habits related to credit cards. Using credit cards to make payments remained similarly unchanged for most provinces; those in Saskatchewan and Manitoba (68%), Alberta (61%), Atlantic Canada (61%), British Columbia (59%) and Ontario (57%) shared they used credit cards for this purpose at the same rate as six months ago. Buying additional items to get a "perk" was also common across the country – of the Canadians who shared they participated in this kind of unconscious spend (54%), those in Ontario (56%), Atlantic Canada (55%), Alberta (55%), British Columbia (54%) and Saskatchewan and Manitoba (50%) did so with the same frequency.

Young Canadians should continue to be mindful, while older Canadians also remain concerned  

Canadians 18-34 whose unconscious spending habits became more frequent in certain areas should continue to be mindful of the impact on credit card bills. This age group was more likely to say that, compared to six months ago, they used credit cards to make payments (34%), charged monthly subscriptions to credit cards (29%), bought more than intended during sales (28%) and used "buy now, pay later" plans more often (27%).

Canadians 35-54 (57%) and those 18-34 (53%) were more likely to be concerned about their current financial situation, compared to those 55+ (43%). Of note, those 35-54 and 18-34 also said they were engaging in unconscious spending habits at about the same rate as six months ago.

Canadians shouldn't sleep on asking for help

The challenge of unconscious spending is in the name – it's a quiet, subtle practice that can be very difficult to recognize, let alone change. The Quiet Spend revealed that many Canadians (69%) who work with a Certified Financial Planner® professional or Qualified Associate Financial Planner™ professional felt much better about their overall financial picture compared to those who use no financial planning assistance at all (38%).

Here are some tips from CFP® professionals and QAFP™ professionals on how small changes can help you take a more mindful approach to money:

• "A helpful way to control some unconscious spending is using cash when going out for entertainment, rather than credit or debit cards," shared Kevin Cork, a CFP professional at FundEX Investments in Calgary, AB. "Further, if you decide to stay in, consider putting the cash you would have used into a jar to make the savings feel concrete."
• "Creating an honest, regularly reviewed budget to track where your money comes and goes is a crucial first step," said Sucheta Rajagopal, a CFP professional at Research Capital Corp. in Toronto, ON. "Clear budgets help us better identify what benefit we receive from our spending habits, whether emotional or practical, and can make an impact in navigating tough times."
• "Opening a separate savings account specifically used for non-essential spending and linked to your debit card can be a helpful way to regain control over unconscious habits," added Wendy Brookhouse, a CFP professional at Black Star Wealth Partners in Halifax, N.S. "Even better – consider using an entirely different financial institution for this account to minimize temptation to pay using other accounts tagged for essential spending."

In response to the survey results, FP Canada encourages Canadians to bring mindfulness to unconscious spending. FP Canada asked CFP professionals and QAFP professionals from across the country to share what makes them feel a little more mindful. Launched today, we invite all Canadians to take a break with the Mindful Moments playlist on Spotify. 

About the survey

These are the findings of a survey conducted FP Canada from October 21-22, 2022 among a nationally representative sample of n=1502 Canadians who are members of the online Angus Reid Forum, balanced and weighted on age, gender, region and education. For comparison purposes only, a sample of this size would yield a margin of error of +/- 2.5 percentage points at a 95% confidence level.

About FP Canada

A national certification and professional oversight body working in the public interest, FP Canada is dedicated to championing better financial wellness for all Canadians by leading the advancement of professional financial planning in Canada. There are about 17,000 Certified Financial Planner professionals and about 2,000 Qualified Associate Financial Planner professionals (as at Sept. 30, 2022), who meet FP Canada's rigorous professional and ethical standards. Visit the FP Canada website for more information.

SOURCE FP Canada

media inquiries, or to arrange media interviews with a CFP professional or QAFP professional please contact: Emily Ellis, [email protected], 905-599-6138