More than one in three Canadians said that they will be spending less on gifts this year
As many as one in four Canadians who used credit to purchase holiday gifts in late 2022 are still paying off their debts, according to a new survey by NerdWallet Canada.
Approximately half of Canadians (51%) bought their holiday gifts on credit last year, while 48% said that they are planning to follow a “stricter” budget for this year’s purchases. Another 35% said that they will be spending less per person, compared to previous years.
Roughly 15% of respondents who are planning to buy holiday gifts this year said that they intend to pick up a second job or a side hustle to augment their funds.
Twenty-three per cent (23%) of Canadians are planning to save more by using coupons and cash back apps when shopping, while 33% said that they will primarily buy on-sale items.
RBC Economics study shows Canadian spending slowing due to debt pressures. While spending is steady, early signs of weakness coincide with a slight unemployment rate increase.https://t.co/r5amlMW8vO#mortgagenws #mortgageindustry #householddebt #economy— Canadian Mortgage Professional Magazine (@CMPmagazine) August 11, 2023
Financial stress among Canadians at an all-time high
Despite a noticeable improvement in Canada’s household debt-to-income ratio earlier this year, financial stress levels among Canadians have reached a new record high in the latest Annual Survey of Working Canadians from the National Payroll Institute.
The number of working Canadians who described themselves as “financially stressed” increased by 20% over the past year alone to reach an overall rate of 37%. Around 66% of financially stressed Canadians admitted that they are living paycheque to paycheque, while 50% reported being “overwhelmed” by their debt.
“This continues a trend that began in 2021 after an initial decline in 2020 when pandemic-induced lockdowns forced Canadians to save — which, with the benefit of hindsight, turns out to have actually been the calm before the storm,” the Institute said.
Saving up money has also become more difficult in this environment, with 63% reporting spending all of their net pay to cover their needs, and 30% spending more than their net pay.