It has begun: that penny-pinching, parking-pandemonium punctuated time of year we affectionately call the holiday season. Okay, so maybe that’s a bleak picture of what will more than likely be a magical month of shortbread, mistletoe and holiday cheer, but there's no escaping the fact that the shopping season can be expensive.
And, this year, Canadians plan to be more frugal with their spending, according to the latest RBC Canadian Consumer Outlook.
More money shelled out for entertainment than gifts
While overall spending by Canadian gift givers is expected to increase to $1,192.50 from last years $1,181.80, the incremental rise in mostly driven by non-gift expenses like travelling, decorations and food and drink for entertaining.
According to the report 80% of Canadians plan to spend an average of $608.60 on presents. It’s a fall from last year’s bill but not by much. On average Canadians spent $628.50 in 2012.
“Canadians continue to be conscious of their finances and intend to be smart with their expenses this holiday season,” said Richa Hingorani, senior manager of financial planning support at RBC.
Using Christmas credit for holiday consumer spending
While 54% of gift shoppers plan to pay with debit or cash, one in four anticipate using credit. Of course, most of those who do expect to put it on plastic, plan to pay it off within the billing cycle. Only 6% intend to carry a balance over.
If you plan to use a credit card while holiday shopping, make sure you're carrying a no-fee option with great cash back options. The MBNA Smart Cash MasterCard is a favourite with 5% cash back on gas and groceries for the first six months and comes with a free $100 gift card upon approval for a limited time.
In British Columbia, 31% of gift givers are hoping to spend less this year. The province saw the largest decrease in overall holiday spending – $1,088 this year versus $1,326 last year. West coasters plan to spend an average of $557 on gifts.
Albertans seem to be the country’s biggest spenders, racking up a $673 price tag on gifts. While 85% intend to give, a quarter of those in the province plan to reduce holiday spending. Overall expenses for the season are expected to come in around $1,325.
In the prairies (Manitoba and Saskatchewan) total holiday spending is expected to decrease, with residents spending $1,245 versus $1,362. Eighty-six per cent expect to give gifts, spending a total of $618.
Ontarians plan on spending a bit more this year, albeit not too much –$1,245 versus $1,204. Much like Albertans, those in the province plan to spend about $673 solely on gifts.
Quebec seems to be the least materialistic province. While 76% of Quebeckers plan to shop for the holidays, only 20% will reduce their spending.
According to the report, they’re looking to spend $454 on gifts. Atlantic Canada, on the other hand, is planning for a big haul from Santa. Eighty-nine per cent of residents expect to spend an average $730 on gifts.
Plan it out
Whether you’re a big holiday spender or hoping to cut back, it’s helpful to make a strategy.
“One simple yet important step to keep in mind is that, with a little planning, it's easy to stay on top of holiday spending without dipping into your savings or increasing your debt,” said Hingorani. “A holiday budget can go a long way to ensuring you're not over-extending yourself – and come January, you don't regret the holidays.”