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Canadians expect to feel the after-effects of their holiday spending well into the spring, with more than half of shoppers indicating that they found it hard to cover the impact of inflation on costs, according to a poll by Royal Bank of Canada.
The recent holiday season was the first in three years when Canadians could celebrate in-person with family and friends, and RBC said many can still feel it in their wallets.
The poll released Feb. 15 found that more than one-third of shoppers went over their budget during the holiday season, with the average overspend hitting $580, “substantially higher” than the prior year’s average of $414. It also said 36 per cent of Canadians said they think it will take them until April or longer to get their finances back on track.
“This collective spending has created a long payback period, with many carrying these debts into the spring,” Rachel Megitt, RBC’s vice-president for term investments and savings, said in a press release.
The season was especially expensive for those with children, who overspent the most and expect to take the longest for their finances to recover, the report said, adding that this group had the highest expenses across gift categories.
Among the respondents with children, 80 per cent said they felt the impact of inflation on their holiday spending, while 70 per cent found it tough to cover holiday expenses and gifts. Over half spent an average of $614 more than they intended to, outspending the national average. For example, Canadians with children spent $203 on gifts for pets, while the national average was $68 for that gift category, the report said.
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As for when they think their finances will get back on track, 49 per cent of the families said between April and June or beyond.
“This can be really hard on family and individual budgets. And before we know it, the next holiday season will be here and this debt cycle begins all over again,” Megitt said.
Megitt added that Canadians who spent more than intended plan to cut back on spending this year, including on entertainment and other discretionary items, to help pay off expenses.
RBC said 2,000 Canadians over 18 years old were surveyed by Ipsos online between Jan. 3 and 5. It said the poll 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 adults in Canada been surveyed.