Holiday spending is expected to return to pre-pandemic levels this year, but what does that mean for your household finances? For more on that, and some budgeting tips, we’re joined by Jas Dhillon.
What do we know about spending habits for British Columbians this holiday season?
We partnered with Angus Reid on a public opinion poll to see what British Columbians were planning on spending this holiday season. At the highest level, we know that the majority of British Columbians are planning on spending more than average this year than they did in 2020 and even 2019. And of those that are planning on spending more, one third of those respondents did say that they were in a better financial situation than they were last year. Data is showing that the impacts of the pandemic have decreased, which is allowing [consumers] to spend more this year. A return to indoor shopping is also a major driver behind this increase. Two thirds of respondents intend on shopping in store more this year, and 69% are planning to shop locally at our small businesses.
How will this increase in holiday spending impact long term financial goals?
The majority of respondents do realize that the majority of this extra spending is going to put some financial pressure on them this year, and two thirds are planning on using some form of credit to pay for their holiday expenses. What’s equally concerning is that 20% are not planning on paying this off right away. If you’re carrying a credit card balance, you are incurring additional interest charges, that makes it a little harder to pay off that debt. And Canadians are already struggling with household debt. So it is a bit concerning knowing that people are going to be adding to that this holiday season.
Any tips on how people can minimize that post-holiday financial strain?
Yes, absolutely! So the first thing I always suggest is creating a budget, and making sure those extra expenses are aligning with any other financial commitments that you’ve already made. And the second piece is setting some expectations with your family and friends. We’re hearing a lot of people this year say that instead of giving gifts, they’re exchanging time and experiences, setting a limit on gifts, giving stocking stuffers instead of big ticket items. Even White Elephants, so you’re not having to buy everyone a present. And if you are planning on giving gifts, think about helping loved ones alleviate some financial stress. Think about helping someone with a student loan payment, or making a contribution towards a wedding fund or a baby fund, or down payment fund.