Many will spend half the year getting finances back on track
In the annual RBC Post-Holiday Spending & Saving Insights Poll, Canadians made the most of the first holiday season in three years where they could celebrate in person with family and friends. However, many of them are still feeling the aftermath where it strikes most - their wallets.
In comparison to last year's average of $414, 38% of Christmas buyers went over their allotted spending by an average of $580. Inflation had a significant influence on more than half (57%) of those who found it challenging to pay for Christmas gifts. Furthermore, 36% of respondents believe that getting their finances in order won't happen until April or later.
For Canadians with children, who spent more than average and anticipate taking the longest to recover financially, the holiday season was particularly pricey. Most respondents (80%) said that they felt the effects of inflation on their Christmas expenditures, and 70% said that it was difficult to pay for gifts and other holiday expenses. In important gift categories, more than half (56%) of respondents spent over their budgets by $614 on average.
Half of these families (49%) gave an estimate of between April and June or longer when asked how long they anticipated it would take to get their finances back on track.
"It was hard to contain the joy of being together again this past holiday season and our excitement spilled over into generosity. This collective spending has created a long payback period, with many carrying these debts into the spring," said Rachel Megitt, Vice President, Term Investments & Savings and RBC InvestEase.
Megitt pointed out that Canadians who overspent already have plans in place to restore their finances in 2023, including reducing their spending on entertainment and other luxuries and using the money they save to assist cover debt.
"We always ask Canadians what they would do if they found some extra money in the upcoming year. For 2023, the top choice was 'pay down debt'," added Megitt. "Imagine what impact saving up to $473 a month would have on helping to keep debt under control."