Pattie Lovett-Reid: 55% of Canadians plan to spend less this holiday season
A pullback in spending may not bode well for the retail sector this holiday season.
According to new findings from Equifax Canada, 55 per cent of Canadians say they will spend less this year on holiday gifts. The report comes a week after an MNP LTD survey revealed 48 per cent of Canadians had less than $200 at the end of the month after living expenses and debt obligations, suggesting the anxiety is building around the amount of debt households already have. Taking on more debt at a time when there are so many economic uncertainties suggests it isn’t worth the unease and sleepless nights.
The good news, according to the report, is that 58 per cent plan on completing a budget with 54 per cent of those under 55 willing to limit their spending because they are simply carrying too much debt. Meanwhile, 46 per cent have a lot of anxiety about their current debt level situation.
Ironically, this is a great step forward.
We know the debt levels of Canadians continue to rise, income levels continue to be stubbornly low, and bankruptcies have been creeping higher. All recipes for financial ruin. Overspending for the holiday season can lead to additional stress and often leads to a holiday hangover. In other words, the holiday spending blues that are felt by many about the third week in January when the bills start to roll in.
According to Equifax, when asked how long it would take to catch up on their holiday spending, 36 per cent of respondents said it takes them a month or more to catch up.
Beyond concerns surrounding debt, the percentage of those who feel vulnerable to fraudsters has dropped to 45 per cent from 64 per cent three years ago because of steps consumers are taking to protect their personal data such as:
• Reviewing credit card statements for fraudulent activity
• Checking their credit report
• Limiting purchases online
• Avoiding public Wi-Fi
• Updating security passwords
I’m not trying to be Scrooge here, but I’m encouraged that many will take the necessary steps to enjoy the holiday season without the burden of additional financial stress.