TORONTO, Nov. 07, 2023 (GLOBE NEWSWIRE) -- 'Tis the season for holiday shopping and Canadians are ready to spend, despite high inflation rates. Canadian consumers are expected to spend an average of $645 on holiday gifts this year, a significant increase from the $589 spent in the previous holiday season, according to a new study from the Chartered Professionals Accounts of Canada (CPA Canada).
But the pressures of rising costs of living could leave some shoppers with a holiday spending hangover, the survey suggests. A substantial number (74 per cent) of Canadians surveyed expressed concerns that inflation would make it more difficult to purchase holiday gifts this year. A considerable portion, almost one-in-three Canadians (29 per cent), indicated that they could take on debt to fund their festive purchases, compared to 22 per cent last year. Additionally, 30 per cent of those that plan to travel and have a good sense of how much they will be spending on holiday travel anticipate an increase in holiday travel expenses.
Balancing festive cheer with fiscal responsibility
There are a variety of ways to cut spending this season without sacrificing holiday spirit. Canadians have noted that if faced with financial difficulties, 48 per cent would opt for discounted items, 46 per cent would cut back on the number of gifts they give and 27 per cent would use loyalty points. Additionally, 22 per cent would consider giving non-traditional gifts, such as homemade or shared experiences. Meanwhile, 27 per cent of respondents said they would use credit cards to make up for financial shortfall.
Beware of merriment beyond your means
“It’s concerning that the increase in planned holiday spending is tracking above the rate of inflation,” says Doretta Thompson, CPA Canada’s financial literacy leader. “Planning ahead, researching and budgeting for your gifts can keep costs down and help make sure holiday debt doesn’t become your New Years resolution.”
Download CPA Canada’s infographic to show the true cost of borrowing.
A majority, 56 per cent, of respondents said they usually set a budget for holiday spending. Among those that have a sense of how much they will be spending on holiday gifts this year only 16 per cent have stashed away more money for holiday spending compared to last year – a prudent and recommended approach for Canada’s current economic climate.
Thompson continues, “We're pleased to see a growing number of Canadians getting ready for the 'season of spending.' Nevertheless, we are mindful that over one in five Canadians expect to overspend on their holiday budgets. At CPA Canada, our mission is to provide the right tools for financial literacy and debt management. While not all Canadians will go into debt, a significant portion are susceptible to it, making it important to understand the true cost of borrowing.”
CPA Canada shares smart strategies to savour the season with a few tips:
- Who’s on your ‘nice’ list? – Limit your holiday shopping budget to immediate family members and close friends to maximize each dollar you spend. For more distant relations, consider a different approach to gifting this year and buy after the holiday rush when retailers are eager to provide further discounts.
- Start saving early and sleigh the sales – Spreading out your holiday spending throughout the year gives you more time to comparison shop.
- Diversify debt repayment – If you go into debt, it’s important to ensure you get back on track with the least amount of penalty. Remember to transfer your debt to a product with a lower interest rate, such as a line of credit.
Good money management habits will make sure you aren’t haunted by the bills of holidays past. Visit CPA Canada’s online Financial Literacy Resources, featuring a wide selection of free tips, sessions and webinars. For additional resources, the Financial Consumer Agency of Canada has a suite of free financial tools and calculators to help you manage your money, visit: Canada.ca/financial-tools. Learn more about Canadians’ 2023 holiday spending habits and predictions: cpacanada.ca/holidayspending2023.
Survey methodology
These are the findings of an Ipsos survey conducted on behalf of the Chartered Professional Accountants of Canada. Fieldwork was conducted from September 14 - 18, 2023. A total of n=2,000 Canadians aged 18+ participated in the survey which was fielded via the Ipsos’ online omnibus. The combined data has been weighted by age, gender, education and region to ensure the sample composition reflects the Canadian population. The precision of Ipsos online surveys is calculated via a credibility interval. In this case, the sample is considered accurate to within +/- 2.5 percentage points had all Canadians aged 18+ been surveyed. A background document can be found online at: cpacanada.ca/holidayspending2023.
About CPA Canada
Chartered Professional Accountants of Canada (CPA Canada) is one of the largest national accounting organizations in the world, representing more than 220,000 CPAs at the national and international levels. CPA Canada works with the provincial and territorial regulatory bodies to support the profession. Domestically, it acts in the public interest by promoting transparency in financial markets, preparing members for a rapidly evolving business environment and contributing to standard setting and public policy. Globally, CPA Canada works together with international bodies to build a stronger accounting profession worldwide. cpacanada.ca
For more information, contact:
Carla Peacock
Manager, Corporate Communications and Emerging Issues
Chartered Professional Accountants of Canada
Cell: 647-922-7339
Email: cpeacock@cpacanada.ca
