Many Canadians take a savings hit from holiday spending

Poll reveals fewer Canadians feel positive about their financial health

Many Canadians take a savings hit from holiday spending

Fewer Canadian gift-givers in high spirits this year after reviewing their post-holiday finances, according to a new poll from RBC Insurance.

In the latest RBC Post-Holiday Spending & Saving Insights Poll, 42% of respondents reported feeling great because they stuck to their planned holiday spending budget, compared to 48% last year. Those who said they felt good because they overspent a little, but are now back on track, also declined from 30% to 26%.

Those who felt just ok – they spent more on giving than they anticipated, but have a plan to get back on track by April – rose from 18% to 24%.

"It's easy to see why giving experiences has grown in importance during the pandemic, as many are placing more significance on the gift of time together with family and friends," Flora Do, Vice-President at Term Investments & Savings and RBC InvestEase, said. "When each new year begins, the challenge for some becomes how to pay for their generosity over the holiday season and get savings back on track."

When asked whether they are saving anything extra this year, nearly a quarter (22%) said they aren't and don't expect they will have anything more to place up in 2022.

A third of respondents (33%) said that they overspent over the holiday season, with the average Canadian overshooting their budget by $414.

Looking at the different methods Canadians used to pay for their gift-giving, almost half (48%) said they paid with cash or debit cards, while 43% said they used credit cards.

Focusing on overspenders, the survey found that 16% carry the costs on their credit cards and are paying off the balance right away. Another 13% also said they carry the costs on their credit cards, but are going to pay off the balance in at least two months.

More than a quarter of overspending respondents said they would compensate by cutting down on discretionary costs like entertainment (27%) or find ways to save in other areas (28%).

As for the ones who were able to “find” money after spending less than they thought, 33% said they plan to use the extra money to augment their general savings, and nearly the same number (32%) said they’d pay down debt.

Other top responses included saving for a particular purpose (25%), investing (21%), and rewarding themselves (20%).