Income is stagnating, costs are rising, but most will still spend at least the same as 2023
The holidays are synonymous with decadence and indulgence, but with financial stress heightened amid multi-year cost of living pressures, will Canadians be tightening their budgets this year?
Unlikely, given that almost eight in ten won’t have a specific budget according to a new survey from Coast Capital which also reveals that 72% of respondents feel holiday expenses intensifies financial pressures (rising to 84% among those aged 18-34).
The federal financial cooperative’s research also found that 60% of respondents plan to spend at least as much during this year’s season as they did in 2023, while 12% expect to spend more. Even though they are feeling pressured, just 41% said they discuss spending with others, for example suggesting lower cost gifts or managing their expectations.
Most worrying is that 59% of those who took part and said that they are already experiencing high financial stress are planning to take on more debt to cover their holiday expenses, which will only lead to increased pressure and impact their financial goals.
“This new data highlights how challenging it is for people in Canada to get on stable ground, especially when faced with the pressures of the holiday season,” says Xin Lou, financial planner, Coast Capital. “Although it isn’t surprising that 94% of Canadians say they plan to spend on gifts, entertainment and other related holiday purchases, the number of people who are going to over-extend themselves rings some alarm bells.”
Already, 47% of respondents report that they are falling behind on their short- and long-term financial goals due to holiday spending. This has been exacerbated by no significant increase in income over the past year for six in ten participants.
The poll was conducted among 1,683 Canadian adults who are members of the Angus Reid Forum.
