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BMO Psychology of Spending Report: Impulse Shopping a Costly Habit for Canadians

Canadians spending an average of $3,720 annually on items they want but do not need, with men spending more than double that of women

- The majority shop to improve their mood, while nearly half regret purchases after the fact and sometimes spend more than they make on a monthly basis

- One quarter unable to afford something they need because of spending on 'wants'

- Clothing, shoes and dining out are the most common impulse purchases among Canadians

TORONTO, ONTARIO--(Marketwire - Sept. 25, 2012) - According to a BMO report released today, impulse spending is taking its toll on Canadian household balance sheets. The BMO Psychology of Spending report is the first in a series from BMO that will examine personal finance and investing behaviours among Canadians and the resulting effects.

The inaugural report on the spending habits of Canadians found the majority (59 per cent) make impulse purchases, with half (52 per cent) regretting the purchases after the fact, and 43 per cent sometimes spending more in a month than they earn.

The report, conducted by Pollara, also revealed:

  • The majority of Canadians at least sometimes shop to cheer themselves up and buy something they may not need because it's on sale (60 per cent and 55 per cent respectively), and 42 per cent buy items they never use.
  • On average, Canadians spend $310 a month on items they want but do not need, and believe they could save over two-thirds of this amount if they made an effort to limit their spending.
  • The most common impulsive purchases made by Canadians over the past year are clothing (57 per cent), dining out (52 per cent), shoes (39 per cent), books/magazines (38 per cent), and music/movies (31 per cent).
  • Additionally, one-in-five Canadians (19 per cent) have purchased consumer technology items on impulse in the past year.

"Financial anxiety is commonly triggered by larger one-time expenses, but spending on a daily basis can be the most disruptive when it comes to keeping your financial house in order over the long term," said Lily Capriotti, Vice President, BMO Bank of Montreal. "In most cases, impulse spending is an emotional transaction. Setting parameters and tracking your daily spending can help curb behaviours that can negatively affect the larger picture."

Ms. Capriotti noted there are a few practices Canadians can put in place to help track and control impulse spending, including setting aside savings on a regular basis, putting off impulse purchases for an hour, or using online tools to track daily spending and set limits. For example, BMO offers BMO MoneyLogic™ - an online personal financial management tool that enables customers to set and track spending limits and savings goals.

"The data shows Canadians recognize they have the opportunity to save hundreds of dollars per month and thousands per year by cutting back on non-essential items," said Ms. Capriotti. "However, the report shows only one-in-five review non-essential purchases at the end of each month, which implies some may be avoiding the reality of how much of their money is being put towards things they do not need."

Ms. Capriotti added that leveraging a TFSA or a high-interest savings account, such as the BMO Smart Saver Account, can help Canadians maximize these savings.

According to BMO Economics, Canadian household debt excluding mortgages has doubled in the past decade and consistently outrun disposable income, with the debt-to-income ratio rising from 42 per cent in early 2002 to a record high 153 per cent earlier this year.

The Consequences of Impulse Spending

  • According to the report, one-third (31 per cent) of Canadians have had to borrow money or take out a loan to pay for non-essential items, with 23 per cent unable to buy something they needed because of their spending on items they wanted.
  • These habits are more common among younger Canadians. One-in-three (33 per cent) of those under 30 have been unable to afford something they needed because of spending on 'wants'.
  • Even high-income earners have felt the consequences of over-spending on non-essentials - 19 per cent of those in households earning at least $100,000 a year have been unable to afford something they needed because of non-essential purchases.


  • On average, men spend twice as much as women on 'wants' ($414 vs. $207), and stand to save more by cutting back ($276 vs. $145).
  • Top 5 Impulsive Purchases for Men: dining out (53 per cent), clothing (47 per cent), books/magazines (32 per cent), shoes (29 per cent), software/apps (26 per cent).
  • Top 5 Impulsive Purchases for Women: clothing (66 per cent), dining out (50 per cent), shoes (48 per cent), books/magazines (44 per cent), makeup (36 per cent).

As part of its ongoing commitment to 'Making Money Make Sense,' BMO has introduced various tools to help Canadians stay on top of their personal finances, including BMO by Appointment, BMO MoneyLogic, BMO SmartSteps, BMO SmartSteps for Parents and BMO SmartSteps for Business.

For more information, please visit

The survey results cited in the BMO Psychology of Spending Report are from online interviews with a random sample of 1,000 Canadians 18 years of age and over, conducted by Pollara between August 31st and September 5th, 2012. A probability sample of this size would yield results accurate to ± 3.1 per cent, 19 times out of 20.

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $542 billion as at July 31, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.

For further information:
Media Contacts:
Matt Duffin, Toronto
(416) 867-3996

Valerie Doucet, Montreal
(514) 877-8224

Laurie Grant, Vancouver
(604) 665-7596

Twitter: @BMOmedia