They overshot their budgets by the lowest average amount in 28 years, putting them on the right track for 2019
It was a season for reindeer games and, at least in Canada, reining in overspending.
In its latest annual Post-Holiday Spending & Saving Insights Poll, RBC found a significant drop in overspending among Canadian shoppers this past holiday season. People overshot their budgets by an average of $384, compared to $530 in 2017. The latest number also represented the lowest level of overspending in eight years.
The poll found the largest drop among 18- to 34-year-olds and women, whose latest overspending records ($363 and $379, respectively) were lower by nearly $200 relative to what they had in 2017. The number of Canadians who overshot their budgets dipped only slightly (40% vs. 42%), but a full 30% of those who spent more than they expected to this past yuletide season report having already settled their debts from their latest seasonal shopping spree.
"We're all tempted to toss aside the budget during the holiday season, but what a good news story to see that Canadians showed restraint this year and far fewer are entering 2019 with holiday debt weighing them down," said Vinita Savani, vice president for GICs & Savings at RBC. “Canadians are starting 2019 off on the right foot – their next step will be managing their spending throughout the year and seeing if they can build up their savings too.”
Saving continues to be a challenge for Canadians. When polled on their expectations of setting aside money beyond what they are currently saving, 23% of Canadians said they weren’t saving regularly now and didn’t think they would be able to save anything “extra.” Savani noted that RBC’s NOMI Find & Save offering, which was launched in October 2017, has been helping Canadians by finding extra money that they likely won’t miss and automatically places it in a savings account.
The national survey also found that Canadians spent the most on giving experiences to family and friends, amounting to an average expense of $129. That was followed by gift cards ($119), electronics ($102), and toys ($96). Lower on the rankings were entertainment ($51), gifts for pets ($29), and charitable donations made on someone else’s behalf ($28).
As for overspenders with unpaid holiday bills, 30% said they would spend less on entertainment, lunch, and coffee to get their finances back on track. Twenty-five per cent said they’d cut back on day-to-day living expenses. Another 34% focused on carry costs on their credit card, committing to either off the balance on their credit cards within two months or more (20%) or pay it off immediately (14%).