A survey by CIBC says it looks like Canadians will spend less this holiday season! $597 bucks is the average amount Canadians say they will spend on holiday shopping, compared to $652 last year.
Albertans on the other hand will spend 6 per cent more this season at $688, while Ontarians and Quebecers cut their holiday shopping budgets by 12 per cent and 10 per cent. Despite trimming their shopping budgets by 7 per cent, those in Atlantic Canada are still the country’s top gift-buyers, spending $803.
Millennials are reducing their holiday spend by 14 per cent to about $400 on average.
51 per cent expect to go over budget and carry some holiday debt, with many (13 per cent) anticipating that they will feel ‘a little guilty’ or the ‘pain’ of overspending when their bill comes due in January.
57 per cent pay off their credit card balances in full and 13 per cent say they don’t use a credit card, while nearly a third (29 per cent) carry their debt forward.
Millennials more likely to overspend
Millennials are more apt to buy on credit than those aged 35+ (60 per cent vs. 52 per cent) and one in five (20 per cent) expect their shopping to result in them feeling ‘a little guilt’ or ‘pain’ when their card bills come due. They also tend to carry card debt longer, with nearly half (48 per cent) carrying credit card debt forward for more than a year, including 18 per cent who say they can’t remember the last time their balance was zero.
The poll findings also show that nearly two-thirds of Generation X-ers (35-54 years) with card debt either carry balances forward one year or more or can’t recall the last time they had a zero balance.
The poll also shows that the likelihood to overspend over the holidays is true for all Canadians regardless of age or income. In fact, more than half (52 per cent) with higher incomes break their budget.
Tips to avoid financial pain after the holidays:
1. Change expectations – While every family and tradition is different, talk to your family and friends about setting spending limits or be creative and consider making new traditions as alternatives to expensive outings and gift buying.
2. Track your spending – Be aware of what you’re spending in stores and online, include everything from gifts, party clothes, tips, entertaining and travel costs. Use tracking tools, such as CIBC CreditSmart, to help you avoid creeping expenses.
3. Go Prepaid – set a hard limit with a reloadable prepaid card. CIBC Smart™ Prepaid Visa* Card can help you stick to your budget by pre-setting your day-to-day discretionary spending.
4. Entertain at home – Avoid hefty restaurant bills by entertaining family and friends at home. Consider sharing costs of food and drink with ‘BYO’ meals or potluck for additional cost savings.
5. Be smart about credit – If paying by credit card, choose the one that works best for you. While paying on credit offers considerable consumer benefits and rewards, stay on top of your money and avoid late fees with alerts sent to your phone or email. This will help you reap rewards benefits and avoid the pain of carrying balances forward and incurring interest.
6. Seek advice – If you get to January fearing the bill of your holiday spend, don’t worry: You’re not alone. Talk to an advisor to help you create a budget to manage your cash flow, and set you on the right track for 2017 so that you only take on debt that can be comfortably managed and paid off.
2016 Holiday Spending Poll Disclaimer:
From December 2nd to December 4th 2016 an online survey was conducted among 1,516 randomly selected Canadian adults who are Angus Reid Forum panelists. The margin of error—which measures sampling variability—is +/- 2.5%, 19 times out of 20. The results have been statistically weighted according to education, age, gender and region (and in Quebec, language) Census data to ensure a sample representative of the entire adult population of Canada. Discrepancies in or between totals are due to rounding.
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