Canadians made the most of the first holiday season in three years where they could celebrate in person with family and friends, but many of them are still feeling the after-effects where it hits hardest – their wallets, according to the annual RBC Post-Holiday Spending & Saving Insights Poll.
Over one-third (38%) of holiday season shoppers went over budget by an average of $580, substantially higher than last year’s average of $414. More than half (57%) found it hard to cover the costs of holiday gifts, mostly due to the impact of inflation. And over one-third (36%) think it will take them until April or longer to get their finances back on track.
It was an especially expensive holiday season for Canadians with children, who overspent the most and expect to take the longest for their finances to recover. The majority responded they felt the impact of inflation on their holiday spending (80%) and found it tough to cover holiday expenses and gifts (70%). Over half (56%) spent more than they intended to, going over budget by $614 on average, significantly outspending the national average in key gift categories:
- $284 vs. $189 – gifts of experiences
- $203 vs. $68 – gifts for pets
- $161 vs. $77 – toys
- $146 vs. $79 – mobile devices/computer electronics/gaming consoles
- $140 vs. $127 – gift cards
- $133 vs. $61 – entertainment items (DVDs, games, books, iTunes)
When asked how long they thought it would take for them to get their finances back on track, half (49%) of these families estimated between April and June or longer.
“It was hard to contain the joy of being together again this past holiday season and our excitement spilled over into generosity. This collective spending has created a long payback period, with many carrying these debts into the spring,” said Rachel Megitt, Vice President, Term Investments & Savings and RBC InvestEase. “This can be really hard on family and individual budgets. And before we know it, the next holiday season will be here and this debt cycle begins all over again.”
Helping Canadians get their finances back on track
Megitt noted that Canadians who spent more than intended already have some actions in mind to get their finances back on track in 2023, including spending less on entertainment and other discretionary items, to use those savings to help pay off expenses.
“To complement those actions, we also have a no-stress digital savings solution that can help you save money,” explained Megitt. “NOMI Find & Save uses predictive technology to analyze your regular deposits and expenses, and automatically put aside money it thinks you won’t miss. These automatic savings may start out small, but they can build really quickly, without any effort on your part. Even better, between now and next holiday season, you could have set aside enough extra savings to make a real impact on your gift-giving expenses.”
Offered to clients at no cost within the RBC Mobile app, NOMI Find & Save also makes it easy for clients to view their balance, as well as pause and restart the automatic savings, 24/7. They can move money back into their regular bank account whenever they wish; they are in complete control. Over the last year alone, NOMI Find & Save has saved an average of $473 per month for clients who are actively using the account.
“We always ask Canadians what they would do if they found some extra money in the upcoming year. For 2023, the top choice was ‘pay down debt’,” added Megitt. “Imagine what impact saving up to $473 a month would have on helping to keep debt under control.”