For some Canadians, the new year is a time of renewal and new beginnings. For others, it will bring a nasty holiday spending hangover.
According to a Harris/Decima survey for CIBC, nearly half of Canadians splurged on themselves by spending about $134 on average in unplanned purchases over the holidays. That was over and above the nearly $400 they planned to spend on gifts and other holiday expenses.
Canadians probably indulged even further, according to a number of BMO surveys and reports. Canadians likely spent a record amount in alcohol this holiday season, contributing to an estimated $19 billion in sales of wine, beer and spirits in 2012, according to BMO Capital Markets.
A Pollara survey conducted for BMO just before Christmas also found that 60% expected to spend time and money to travel over the holidays. And nearly two-thirds of Canadians planned to be out looking for deals on Boxing Day.
All told, BMO suggested Canadians spent more than $1,600 on average during the Christmas season this year.
All that spending, while a jolt of good news for retailers, might be a drag on the economy in the longer term. A Consumer Protection BC survey suggested that while 95% of consumers in the province planned to buy gifts this holiday season, 24% didn't have the money available to pay for them. About 16% planned to use their credit cards to make purchases and pay the total amount off over time. Five per cent said they planned on using a bank overdraft, 2% would take out a payday loan and 1% said they planned on taking out a bank loan to buy gifts.
British Columbians appear to embody a noble level of generosity given that nearly a quarter of B.C. residents are willing to go to such financial extents to spread holiday cheer. After all, nearly 80% donate to charity each year, according to Statistics Canada, and only a quarter bother to report their donations on their tax returns, according to a Fraser Institute report. But there should be no shame in living within one's financial means. The price of not doing so is too high for both giver and receiver. •