Canadian holiday season shoppers overspend again
Canadian shoppers overspent once again this past holiday season – and did so in much higher numbers than last year (51 per cent vs. 41 per cent) – according to the annual RBC Post-Holiday Spending Poll. The average amount of money Canadians overspent by also rose to an average of $403, compared to $397 in 2015.
The good news: Overspenders have entered 2017 with plans already in mind to cut down on expenses and get their savings back on track, including cutting back on entertainment (42 per cent), lunches and coffees (33 per cent).
Canadian consumers in general also have identified specific actions they plan to take in 2017, to better prepare for the next holiday season. One-third (36 per cent) will be setting aside savings on a regular basis, while 29 per cent will be creating a budget earlier in the year, including savings for the holiday season/gift expenses.
“Seeing post-holiday bills as they arrive this month is a great wake-up call for anyone who spent more than they intended,” said Vinita Savani, vice-president, GICs & Savings, RBC. “It’s good to see Canadians focusing now on ways to save throughout the year ahead, to help with expenses next holiday season.”
The RBC poll found that more women overspent than men (55 per cent vs. 47 per cent) and 18 to 34 year olds were the largest group of overspenders (68 per cent) compared to shoppers aged 35 to 54 (52 per cent) and those aged 55+ (37 per cent).
Across the country, the largest majority of overspenders (63 per cent) live in the Prairies. Over half (54 per cent) of Ontarians overspent during the holidays, as did 49 per cent of Quebecers and 47 per cent of those living in Atlantic Canada, Alberta and B.C. respectively.
An increase in consumer spending was called out as the key driver of the Canadian economy in the December 2016 RBC Economic Outlook. The report identified a number of factors that were favourable to consumers, including increases in employment and household net worth.
“The key is for consumers to spend thoughtfully – to take the time to consider how important any purchases are,” Savani noted. “We also know that Canadians continue to look for simple ways to help them budget and to develop a savings habit. By setting aside even small amounts of money on a regular basis – through automatic deposits or a savings plan – you’ll be surprised at how much you can save by year’s end.”
Here are four tips to help Canadians get a head start on saving for the 2017 holiday season:
1. Start saving up early. Yes, the holidays seem far away now, but with a bit of planning, by the time they arrive, you’ll be prepared and will know how much you can spend.
2. Keep a separate account dedicated to savings, so these funds won’t get mixed in with your day-to-day cash. Use the “pay yourself first” approach to set aside savings each month – an online resource such as the Save-Matic can help you do this.
3. Track your expenses. Make a list of all your expenditures over three months to see where there are opportunities to turn spending into saving – online resources such as the Easy Budgeting Tool and Savings Calculator can help you do this.
4. Visualize your savings goal. Are you saving for a vacation? A big screen TV? Keep a photo of your dream as a screensaver on your mobile phone, to inspire you to continue saving.
About the RBC 2017 Post-Holiday Spending Poll
These are the findings of an Ipsos Reid poll conducted January 3 to 8, 2017. A sample of 2,006 Canadians was interviewed from the Ipsos I-Say panel. Quota sampling and weighting was employed to ensure the sample’s composition reflects the adult population according to Census information. The accuracy of Ipsos Reid online polls is measured using a Credibility Interval. In this case, the results are accurate to within ±2.5 percentage points, 19 times out of 20, of what the results would have been had the entire population of Canadian adults been polled. Credibility intervals are wider for smaller subsets of the population.
SOURCE RBC Royal Bank