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Holiday | Personal Finance

People plan to spend less on gifts, but still need to plan ahead

Canadians aiming to pay an average of $643 on presents, CPA Canada Holiday Spending Study finds. And more than 80 per cent say they’ll spend less than $1,000.

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The holiday shopping season is in high gear and the question is: how much are Canadians planning to shell out on gifts? According to the annual CPA Canada Holiday Spending Study*, people will spend an average of $643 on presents in 2018. 

 Holiday Spending Chart 1

More than eight in ten (84 per cent) of the survey respondents say they’ll spend less than $1,000 on gifts, while just 13 per cent anticipate spending more. When looking at other holiday-related spending, 64 per cent of respondents plan on spending less than $200 on travel and 76 per cent won’t exceed $400 on entertaining. As well, 64 per cent admit they don’t save up for gifts during the year. 

Doretta Thompson, CPA Canada’s director of corporate citizenship, is pleased to see Canadians will be prudent with their dollars this year. “It’s encouraging that most of the survey participants plan to keep their spending in check,” she said. “This is consistent with the findings of our Summer Spending Survey, where Canadians indicated they had less room for spending because of the increase in the cost of basics, like transportation, food and energy. Many Canadians could make it easier on themselves by planning ahead and saving throughout the year. Thinking ahead can sure help make the season one of good cheer.” 

BE REALISTIC ABOUT HOLIDAY SPENDING 

Holiday Spending Stats

However, Canadians will likely fork out more than they expect to. According to the survey, people are aware they may end up spending more than planned, with 69 per cent of people who think they will overspend saying they will likely go over budget when buying presents for children or significant others.

Consumers also fail to take into account their total holiday spending, says Kelley Keehn, a consumer advocate with the Financial Planning Standards Council and author of Protecting You and Your Money: A Guide To Avoiding Identity Theft and Fraud (published by CPA Canada). This includes things like bringing wine to parties, drinks on New Year’s Eve, holiday decorations, gifts for people at work, the all-inclusive hotel in Mexico and so on. 

“Account for anything you spend that’s above and beyond what you spend in a normal month,” she says. 

PLAN AHEAD TO SAVE MONEY

Holiday Spending Chart 3

Like Thompson, Keehn agrees that a little planning can go a long way to staying on budget. And don’t visit the mall at the last minute, which 11 per cent of people who participated in the CPA Canada survey say they’ll do. 

“The holidays are an emotional time for people and retailers know it,” says Keehn. “It’s why they bring out the bling and the music—it becomes overwhelming and people overspend.”

So, how can consumers avoid breaking the bank this year? Keehn has a few suggestions:

  • Write down the names of everyone who needs a gift. Just like with grocery shopping, a list will make it easier for people to only buy what they need and not more. 
  • Look online and develop some idea of what loved ones may want and how much those gifts will cost. (According to the survey, 46 per cent of people do plan on shopping in store, while 16 per cent say they’ll spend most of their gift-giving dollars online.)
  • Tally up your total spending in January and then start putting a few dollars away every month, so you’ll have money to spend come next holiday season. “Once you know what you’re spending, you can vow to be realistic next year,” says Keehn.

And she has a final tip: watch out for holiday sales. While 64 per cent of Canadians say they’ll participate in either Black Friday, Cyber Monday or Boxing Day—and the former two sales holidays often last throughout December—just because something is 20 per cent off doesn’t mean it should be bought. “Whether you’re buying for yourself or a friend, ask yourself, do you really need it?” says Keehn. “Be a savvy shopper.”

MORE GIFT-GIVING IDEAS

Don’t know what to get the CPA in your life? These six quirky gifts might just be the answer you’re looking for. But stay alert while shopping—in store and online—so you can avoid spending your hard-earned dollars on counterfeit products.

*The CPA Canada 2018 Holiday Spending Study was conducted by Nielsen via an online questionnaire from November 2 to 8, 2018 with randomly selected Canadian adults.