Most Canadians plan to cut back on spending this holiday season, survey shows

If you’re thinking about cutting back on your holiday spending, you’re not alone this year, according to a new survey.

The Bank of Montreal’s Real Financial Progress Index shows 79 per cent of Canadians are planning to spend less this holiday season. It also says more than half are feeling financial anxiety over holiday spending, and almost a quarter are feeling uncertain they will be able to pay off holiday bills on time.

“Faced with higher living costs and a rising unemployment rate, it’s no surprise that many Canadians are planning to scale back their holiday spending plans this year,” says Sal Guatieri, a senior economist at BMO.

In an interview with CTV News Ottawa, Financial Analyst Bruce Winder says the numbers don’t come as a shock.

"There’s still a lot of uncertainty," Winder says. "I think you're finding people being a little more cautious. Consumer debt is high. Consumers are still feeling a little nervous about the economy."

On average, Canadians plan on spending almost $2,000 this holiday season, with the majority of the spending on travel ($1,802), followed by holiday gifts ($519) and entertaining, decorations, and other holiday expenses.

Winder says a major trend he’s seeing is people getting creative in their spending, which began last year.

"They’re looking for ways to maybe try to reduce spending, you know, whether it's through giving gifts to less people, buying less expensive gifts, thrifting gifting," Winder said on Monday.

The survey also found that despite the economic conditions affecting spending plans, the majority of Canadians plan to make charitable donations this season. One third are planning on giving donations to charity, while many others are planning on donating their time to various causes.

BMO’s numbers also show it will take many people an average of three months to pay off their holiday spending this year.

Christmas comes with lots of obligations and expensive events, as well as the pressure of gift-giving. No matter what you do for the season, if you’re feeling the pinch, Winder suggests the best thing to do is stick to a budget.

That includes taking stock on who you are buying for and being strict with yourself by keeping track of how much you’re spending.

“It might not be pretty,” Winder says. “You may have to tell some people that you can't participate this year, but it's better to do that than, you know, look at massive, massive credit card debt come January, February that you just can't pay off.”

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