CPA Canada study predicts a jolly holiday for Canadians with spending down but spirits up
Thursday, 18 November 2021 12:00.PM
'Tis the season to be jolly and the gift of optimism is more prevalent among Canadians this year than last. According to the Annual Holiday Spending Study from Chartered Professional Accountants of Canada (CPA), Canadians are feeling much more hopeful this year, with 45 per cent of those surveyed feeling optimistic about the upcoming holiday season, compared to only 33 per cent last year. Pessimism has dropped drastically with only 14 per cent of Canadians feeling negative about the holidays, compared with 27 per cent in 2020.
While holiday spirits are up, holiday spending is expected to be down slightly with Canadians planning to spend $555 on gifts this year, a small decrease from $588 in 2020 and $583 in 2019. Holiday travel and entertaining plans are also expected to remain conservative this year: 38 per cent of survey respondents plan to spend less than $200 on holiday travel in 2021, which is the same as last year, with 31 per cent not planning to spend anything at all on travel this season. Canadians are remaining cautious about entertaining with 48 per cent planning to spend less than $200 on holiday entertaining, similar to last year at 45 per cent, and 12 per cent planning to spend nothing on holiday entertaining in 2021.
Heading back to brick and mortar
The study revealed that Canadians are opting for shopping in-store again as restrictions loosen and vaccination rates increase. Of those planning to purchase holiday gifts, 35 per cent plan to do the majority of their shopping at brick and mortar stores this year. This is an increase from 30 per cent who planned to do the majority of their shopping in person last year but is still lower than the pre-pandemic levels of 45 per cent in 2019. Conversely, roughly one-quarter (26 per cent) plan to shop predominantly online this year, compared to one-third (33 per cent) last year.
"For those heading out to shop in person, we recommend starting early," says Doretta Thompson, CPA Canada's financial literacy leader. "The pandemic has created supply chain issues that may affect holiday retail shopping this year. To get the gifts you want at the best price possible, we encourage Canadians – particularly the nine per cent who say they are last-minute shoppers – to join the 21 per cent who plan to start their shopping early and get it done as soon as possible."
The pandemic's impact on shopping and saving
This year, 17 per cent of Canadians say that they will be spending more due to the impact of COVID-19, while 22 per cent plan to spend less. And, when compared to pre-pandemic years, 34 per cent of those surveyed said that COVID-19 has made it easier to save for the holiday season, while 30 per cent of Canadians think the pandemic has made it harder to save.
CPA Canada's holiday spending tips:
- Set a holiday budget and stick to it: According to the study, 48 per cent of Canadians normally set a budget for holiday gift spending and, this year, only 12 per cent anticipate overspending. Tracking holiday expenses will help keep spending in check, adding comfort and joy to your season.
- Give the gift of talent or time:Channel your inner elf like the 43 per cent of Canadians who plan to give a non-traditional gift this year. Whether it's crafting a handmade gift (20 per cent); re-gifting a previous present (10 per cent); or promising to do something special for those on your list (nine per cent), 'tis the season to think outside of the gift box.
- "Sleigh" the sales: Over half of Canadians (57 per cent) plan to shop at sales for gifts, with favourite choices being Black Friday online (36 per cent), Cyber Monday online (26 per cent); Black Friday in store (23 per cent) and Boxing Day/Week in store and online (both at 17 per cent).
- Think and plan ahead: The holidays can add strain on already tight finances. Instead of carelessly overspending, join the 37 per cent of Canadians who have been saving money during this year to help pay for holiday gifts. A seasonal savings strategy will make your holidays – and the post-holiday period – merry and bright.
- Pay down debt: The study revealed that paying down debt is a priority for many Canadians in 2022: 27 per cent label it a high priority and 22 per cent say it's a medium priority, although the largest group (34 per cent) say they don't expect to have any debt to pay off in the new year. A financial plan combined with a realistic annual budget will give you ease of mind this holiday and set you up for a truly happy New Year.
- Participate in the CPA Canada Financial Literacy Program: This is a free, unbiased and objective financial literacy program that offers live sessions, tools and resources. The latest free virtual sessions focus on topics such as effective tax strategies, estate planning and debt. Run by CPA members at a grassroots level, interested Canadians can learn more by visiting: cpacanada.ca/financialliteracy.
"Don't wait until you make your New Year's resolutions to start improving your finances," says Thompson. "The sooner Canadians' get started, the sooner they can experience the benefits of smart financial decisions."
SOURCE: CPA Canada