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Maybe Ebenezer Scrooge Was Onto Something

Most Canadians make holiday purchases, and most of them overspend. Here are some tips to make it a festive time without going into debt.


Have the holidays become too commercialized?

A new survey shows that while holiday spending may send businesses into the black, holiday costs are pushing many Canadians into the red.

The Manulife Bank of Canada 2018 Fall Debt Survey polled over 2,000 Canadians between ages 20 and 69 with a household income over $40,000. The national results were weighted by gender, age, region and education to match national census data.

The survey found that the pressure to spend more around the holidays leaves many Canadians spending beyond their means. Two thirds of Canadians planned to make holiday purchases this year, including gifts, travel expenses, and holiday parties.

Of participants with planned holiday spending, 6 out of 10 hadn’t set a budget at all or were likely to overspend. But even those shoppers who had set a budget they planned to stick to aren’t doing much better, with half still reporting being likely to overspend.

Half of holiday shoppers admitted to having previously gone into debt to buy gifts.

Three quarters of shoppers planning to use some form of credit planned to use a credit card as their primary form of payment. With high interest rates that compound daily, this is one of the more expensive ways to borrow money.

It’s unsurprising that a quarter of holiday spenders responded that the financial stress of the holiday season has a negative impact on their mental health.

A whopping 8 out of 10 believe that the holidays revolve too heavily around spending.

Household debt across Canada remains near a record high, but many Canadians still feel pressured to give gifts as they would have in better financial times. Despite their generosity, 3 out of 10 spenders say they ultimately wind up regretting their holiday totals and struggling to repay their debts.

Holidays aside, half of Canadians surveyed believe that debt holds them back from the things they want to do throughout the year. It’s an alarming statistic, but 4 out of 10 Canadians with debt don’t believe they will ever be completely debt-free.

The holidays are a particularly tough time to maintain a tight budget. It feels lonely to be unable to go to parties or to fly home, and no one likes to disappoint the people they love.

It may seem like the obvious solution, but spending less and planning more takes a lot of thought and discipline. Shoppers who find themselves in debt this year might start by looking at the amount of that debt and setting goals for saving throughout the year for 2019 holiday spending.

Making that list and checking it twice doesn’t hurt, either. Making a budget and shopping list — and sticking with it! — helps shoppers stay on target.

A Secret Santa or White Elephant gift exchange could also help pare down the number of gifts to buy. With each participant being responsible for just one gift, everybody saves and everybody still walks away with a gift.

Would-be shoppers might also consider being more generous with time than with their wallets. Many options could feel even more meaningful than a commercial gift, like setting aside quality time, helping an elderly neighbour with a household repair, or offering childcare to give a friend a much needed night out.

It’s unfortunate that the holidays have become such a financially stressful time for so many Canadians. For spenders filled with holiday stress and regret, hopefully some advance planning can help them stay in the black.

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Karyn Ho is a science animator and engineer who thrives at the interface between science, engineering, medicine, and art. She earned her MScBMC (biomedical communications) and PhD (chemical engineering and biomedical engineering) at the University of Toronto. Karyn is passionate about using cutting edge discoveries to create dynamic stories as a way of supporting innovation, collaboration, education, and informed decision making. By translating knowledge into narratives, her vision is to captivate people, spark their curiosity, and motivate them to share what they learned.