Are You Part of Canada's New Culture of Thrift?

Recently released survey data from leading ad agency Bensimon Byrne provides a snapshot of how Canadians are thinking and feeling about the current recession. Survey results show whether and how we’ve altered our personal spending on the whole, and how we think we will fare over the next year.

"Culture of thrift" has united the nation

One of the strongest findings of the survey is that a "culture of thrift" has emerged in Canada, similar to the U.S. trend. Canadian consumers say they are now seeking value for money, not status. This new frugal mindset shows up in our spending, as spending on brand names has weakened while generic and "no-name" products are gaining ground.

Most Canadians say they expect to spend less over the coming year, ratcheting back on "discretionary" purchases such as entertainment and travel while focusing their spending on "essentials" such as kid’s clothing and groceries.

Middle-aged, middle-income hardest hit by recession

The thrifty mood has been adopted by the population at large, although the recession has affected different populations differently. The young, the affluent, and seniors view current conditions more like a "bump in the road" than a permanent disruption to their standards of living. These populations are the least likely to report changes in their personal or household spending.

In contrast, middle-aged Canadians with middle-sized incomes show the greatest strains. More than half of the Canadians surveyed say they are "doing worse financially" now than they were a year ago – this is up a big 15 percentage points from the same time last year. Women, residents of British Columbia, and Canadians age 35 and over are more likely to say they are in worse financial shape this year than they were last year.

Biggest spending changes come from those with largest debts

Fully one-third of Canadians say they have so much consumer (non-mortgage) debt, it will take them three years or more to pay off. These are the people that are likely to make the biggest spending changes. Women and people between the ages of 25 and 44 carry the largest debt loads.

The biggest reported cuts in spending are in eating out and travel outside of Canada. Instead, people say they are cooking and watching movies at home, as well as making more visits to the gym. 2009 has become a time of "inexpensive self-improvement," the survey reports.

Consumers are thinking differently about "wants" versus "needs"

Whether strongly impacted by the recession or not, the vast majority of Canadians – more than 75% – say they have reduced their spending over the last year. Fully 40% say they are spending "much less" than they were last year. Canadians say they are thinking much more about the difference between "want" and "need." (Only 12% said they are not thinking about wants and needs differently than they were last year.)

69% said they are "trying to save more," but 73% reported they had lost confidence in stock markets. So there is a strong inclination to save, but less inclination to invest.

Most Canadians are optimistic about their futures and the future of the country

No matter where they stand in relation to the current recession, most Canadians report they think both their personal financial situation and the country’s economic conditions will be better a year from now. We will continue to watch these indicators for you to help you make sense of what is happening, so you can make the choices that are right for you and your family.