40% will spend now, worry later according to a new survey from Rates.ca
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Canadian shoppers are likely to make some impulse purchases during their holiday spending but a sizeable share won’t have considered how to deal with the debt it leaves them with.
With 75% of respondents to a Rates.ca survey expecting to make impulse purchases, 40% admit to not having a plan to repay the debt they accrue, and many are likely to overspend.
Almost half said they overspent during the holiday season in 2018 and 12% said that was at least $500 more than they had planned to spend.
Spending on friends is the top impulse activity but meals, entertainment, and events are all set to attract spur of the moment spending.
"The holidays are a season for giving, so it's no surprise that Canadians are prone to making impulse buys," said Sara Kesheh, Vice President, Money, Rates.ca. "To prevent a financial hangover in the new year, Canadians should have a plan for their holiday spending."
Women are more likely to make impulse purchases for other people than men (77% vs 68%), but men are more likely to impulse-buy for themselves (42% vs 38% for women).
The likelihood of impulse buys increases in Atlantic Canada, Manitoba, and Saskatchewan where 83% say they are prone to spontaneous spending on gifts; those in BC are least likely at 65%.
Ignoring the debt
The survey reveals that 60% of families with children reported overspending on the holidays last year and 39% of those with children under 18 sacrificed spending in other areas to manage their debt.
For those without children under 18, almost half (46%) ignored their holiday debt, compared to 27% of families with children.
Fifty-four percent of holiday shoppers had a plan for managing their celebration-related debt with 31% spending less in other areas, while 24% resorted to taking money out of their savings.
Older Canadians (55+) are more likely to ignore their debt than under 55S (51% vs 34%).
Black Friday, Cyber Monday
A separate survey of Canadian shoppers shows that the increasingly popular Black Friday and Cyber Monday weekend will attract a large share of holiday spending.
RetailMeNot.ca found that 55% of Canadians are looking to shop for holiday gifts over the Black Friday and Cyber Monday weekend with 45% of those planning to spend between $250 and $900 during Black Friday and Cyber Monday, with a reported average of $738.
Other recent reports have differed on whether Canadians will spend more or less this holiday season.
A PwC survey suggested that spending will increase but an Equifax poll found that spending will be curbed this year.
