Holiday overspending hits 8-year low

If your client blew their budget this past holiday season, the damage might be less severe than in seasons past. Holiday overspending dropped to its lowest level in Canada in eight years, according to a poll by Toronto-based Royal Bank of Canada (RBC).

The RBC Post-Holiday Spending & Saving Insights Poll found that overspending was down 28% from 2017, with Canadian consumers spending an average of $384 over their budgets (down from $530 in 2017).

The biggest drop was among women and those between the ages of 18 and 34, who cut their spending by nearly $200. While 40% of Canadians went over their budgets, one-third have already paid off that debt.

“Canadians are starting 2019 off on the right foot,” said Vinita Savani, RBC’s vice-president, GICs and savings, in a statement.

Over the holidays, Canadians spent the most on experiences for family and friends ($129), followed by gift cards ($119), electronics ($102), toys ($96), entertainment ($51), gifts for pets ($29) and giving to charities on behalf of family and friends ($28).

To climb out of their holiday spending holes, the poll found that Canadians plan to spend less on entertainment, lunch and coffee (30%); and spend less on day-to-day living expenses (25%). Some are planning to carry costs on credit cards, in which case 20% plan to pay off the balance in two months or more, and 14% plan to pay off the balance immediately.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.