Present-giving spending tendencies
The vacations could be costly. Along with items, folks spend on journey, meals and drinks, particular occasions, and yearly charitable donations. Nonetheless, gift-giving stays a precedence for Canadians of all ages. Even with rising prices, present spending is up 10% from final 12 months, averaging $661 in 2025.
Whereas Canadians share a need to offer vacation items, there are clear variations in how generations deal with their budgets.
About 70% of individuals aged 55 and over plan to spend about the identical on items as final 12 months, utilizing their common revenue and financial savings. However the story is completely different for Gen Z and youthful millennials. Of these between 18 and 34 years previous, 58% anticipate to depend on their bank cards for items. Worryingly, 40% of those respondents have a better present price range than final 12 months.
featured
Finest prompt approval money again card
SimplyCash Card from American Categorical
Earn a minimal of 1.5% money again on all purchases, and three% on U.S. greenback purchases. Redeem rewards whenever you need.
GO TO SITE
Curiosity Charges:
21.99% buy, 21.99% money advance, N/A stability switch
Welcome provide:
$100 worth
Earn a bonus 5% money again on all purchases (as much as $2,000 in purchases). That’s on high of your on a regular basis money again earn charges. That’s as much as $100 in bonus money again.
featured
Silver: Finest money again card
CIBC Dividend Visa Infinite Card
Earn 4% money again on fuel and groceries, and save on the pump with unique gasoline reductions.
GO TO SITE
Curiosity Charges:
21.99% buy, 22.99% money advance, 22.99% stability switch
Welcome provide:
$250 worth
Be a part of and earn over $400 in worth together with a primary 12 months annual price rebate.†
featured
Bronze: Finest money again card
SimplyCash Most popular Card from American Categorical
Get a minimal of two% money again on all of your purchases—one of many highest base charges in Canada.
GO TO SITE
Curiosity Charges:
21.99% buy, 21.99% money advance, N/A stability switch
Welcome provide:
$250 worth
Earn a bonus 10% money again on all purchases on your first 3 months (as much as $2,000 in purchases). Plus, earn a $50 assertion credit score whenever you make a purchase order in month 13. This might add as much as $250 in bonus worth in your first 13 months.
Li Zhang, CPA Canada’s monetary literacy chief, has some concepts about why this is likely to be. Older adults merely have extra observe managing their funds. They could be higher at establishing strong financial savings habits, spending boundaries, and budgets. Vacation spending, Zhang factors out, “is a robust instance of budgeting in observe—spending based mostly on accessible funds.”
Gen Z and youthful millennials really feel the similar spending strain however lack the monetary expertise of older adults. “Youthful Canadians might really feel social or emotional expectations to make the vacations memorable—including strain which might result in utilizing credit score as a fast repair,” says Zhang.
It’s no shock that 56% of younger respondents stated they really feel extra careworn about vacation spending.
How a $661 buy can flip right into a $750 invoice
Whenever you pay with money, the transaction is full on the until. However with a bank card, you’ll be able to simply find yourself paying curiosity—and numerous it. Curiosity begins to accrue on a bank card if you happen to fail to repay the total quantity of your invoice inside the grace interval. That is the time between the tip of your month-to-month billing cycle and your due, often between 21 and 30 days. The issue is, bank cards make it simpler to overspend, leaving you with out the funds to repay the stability in full.
The rate of interest on a median bank card in Canada (not together with specialty low-interest merchandise) is between 19.99% and a whopping 25.99%. To place that into perspective, a cost of $661 accumulating 19.99% curiosity for six months would develop to a stability of round $730. On a card with a 25.99% rate of interest, the full can be round $750, or almost $90 greater than the acquisition worth.
Purchase-now-pay-later (BNPL) gives might look interesting as a result of they typically haven’t any curiosity or charges, however they need to be used rigorously. BNPL is a short-term mortgage that allows you to break up a purchase order into small, mounted funds. However like bank cards, it might probably make overspending simple, and lacking funds might result in charges or have an effect on your credit score.
Budgeting for the vacations
One of the best ways to keep away from a expensive vacation hangover is to stay to a sensible price range. If you wish to have a good time the vacations inside your means, listed here are some sensible tricks to ensure you don’t overspend.
- Price range beforehand. Budgeting isn’t precisely festive nevertheless it does aid you make sound monetary selections. Work out what you’ll be able to realistically afford to spend—and stick with it. When you’re a vacation elf who loves to buy, contemplate opening a financial savings account to avoid wasting up for subsequent 12 months. Professional tip: Store with money to keep away from snap justifications for small extras.
- Trim your checklist. In case your revenue and financial savings don’t enable for one thing for everybody, restrict who you store for. For instance, you may select to simply purchase presents for teenagers this 12 months. Group items could be inexpensive and significant. Fairly than a small present for each coworker, for instance, contemplate a potted plant for the workplace.
- Store secondhand. Thrift shops is usually a treasure trove, they usually typically help native companies just like the hospital auxiliary or a shelter. Instead, contemplate on-line marketplaces.
Sticking to a price range doesn’t make you a Grinch, and it’ll imply a happier new 12 months. Plan your vacation price range beforehand, prioritize spending, and get inventive together with your giving.
Get free MoneySense monetary suggestions, information & recommendation in your inbox.
Learn extra about saving:
