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Canadians' 2023 Finances - Holiday Survey

Written by Jessica Steer
The holidays can be one of the most expensive times of the year. With high inflation rates, rising interest rates and a high cost of living, many Canadians are feeling the pinch more than ever this year.
Table of Contents

    With the season of gift-giving around the corner, we conducted a survey to see how Canadians' finances were impacting them during this holiday season. What we found in this survey may surprise you. 

    Financial Stress During the Holidays

    You may be surprised to learn this, but 58% of Canadians that we surveyed say that they’re worried about money and finances this holiday season. Only 31% percent of the Canadians we surveyed say they aren’t worried, and 10% aren’t sure. These survey stats are generalized from all Canadians we surveyed, regardless of location or income. If we break it down a bit further, we see that the numbers are even higher. 

    When we break the statistics down according to income, of those who earn $50,000 or less annually, 72% of those we surveyed say they’re worried about money and finances this holiday season. We even took a look at the different provinces and how they feel regarding their finances. The province that was the most worried about its finances this holiday season was Saskatchewa, with 70% saying it was concerned. This was the highest percentage compared to the rest of Canada. 

    Inflation in Canada

    With inflation reaching 8.1% in June of 2022, the Bank of Canada has been raising interest rates to help combat this increased rate of inflation and bring it back down to its target rate of 2%. The prime interest rate then was 3.70%. Now, in December, the prime interest rate sits at 7,20% and the inflation rate at 3.1%. Even though the rate of inflation has decreased, the Canadian economy is still feeling the effects of the high cost of living and high debt payments, impacting many Canadians throughout the year and during the holiday season. 

    How Inflation Impacts Gift Giving

    With many Canadians struggling with the new cost of living, we weren’t surprised to find that many are looking into reducing their holiday spending this year. In fact, 68% of Canadians surveyed say the cost of inflation is impacting their holiday plans this year. 56% say they’re planning on spending plans, and 12% say that they aren’t planning on giving any gifts at all. 

    Provincial Breakdown

    We see that 68% of Canadians surveyed overall say that inflation is impacting their spending habits this holiday season. Let’s take a look at a few provinces in Canada and see how many say they're impacted. 

    1. 78% of those in Saskatchewan
    2. 72% in Alberta
    3. 70% in Saskatchewan/Manitoba
    4. 64% in Manitoba
    5. 68% in Ontario
    6. 70% in the Atlantic
    7. 61% in British Columbia

    Age and Income Breakdowns

    In Canada, some other things that affect spending are age and income. Based on the age groups, we can see that over 60% of Canadians in most age groups say their spending is impacted by inflation. Here are the actual breakdowns:

    • Between the ages of 18 and 34, 71% say their spending will be affected. 
    • Between the ages of 35 and 54, 71% say their spending will be affected. 
    • For ages 55 and up, 64% say their spending will be affected. 

    When it comes to income, 75% of those who have an annual income of $50,000 or less say their holiday budgets will be affected. From annual incomes between $50,000 and $100,000, 68% say they’ll be affected. For incomes $100,000 and up, 62% say that they’ll be affected. 

    Gift Giving and the Cost of Living

    Let’s look into how Canadians feel about how the cost of living is going to affect gift-giving this year. We already know that the percentage is going to be high, but overall, 76% of Canadians feel their holiday gift-giving is going to be affected. In fact, 33% of Canadians feel they won’t be able to purchase their loved ones any gifts at all this holiday season. 

    Financing Holiday Expenses

    When we asked Canadians how they’re going to be financing their holiday expenses this season, we also asked them how they typically finance their expenses. Before we get into that, though, let’s look at how Canadians are looking at financing the holidays this year. 

    In Canada, 9% of Canadians are looking into a personal loan to finance their holiday expenses. That said, in Saskatchewan, 20% of residents are looking to get a loan or use credit. This is higher than any other province in Canada. Those who aren’t getting a loan are using either savings or credit cards. 

    How Canadians Usually Finance Their Holiday Expenses

    Let’s take a look at how Canadians would finance the holidays most years. 

    Type of FinancingPercentage of Canadians
    Credit Card37%
    Personal Loan2%
    Other 8%
    No Expenses8%

    If you look at the percentage of Canadians who normally use a personal loan versus those who will use a personal loan this year, we can see that it’s gone up by 7%. That’s a pretty large difference. That shows us that many more Canadians are turning to different financial services in order to keep up with their typical standard of living. 

    You might be wondering what we mean when you list other as a type of financing. This includes:

    • Budgeting
    • Cash
    • Bank account
    • Paycheque income
    • Investment withdrawal
    • Living within your means
    • Purchasing throughout the year

    Gifting Alternatives

    When it comes to gifting, many Canadians are considering alternatives to traditional gifting, such as homemade gifts. In fact, 52% of Canadians say they’re considering different gift-giving practices. In Saskatchewan, 74% of residents are considering using alternative gift-giving practices. 

    The age group that is considering alternative gifting the most is 18-34, with 63% considering it. 60% of females are considering these gifts, whereas only 43% of men are considering them. Out of all the provinces in Canada, the province that is least considering alternative gifting at 43% is Quebec. 

    Comparing Holiday Financial Pressure from 2022 to 2023

    If we’re comparing this holiday season to last year, we can see that many more Canadians are feeling financial pressure in 2023. In fact, 44% more Canadians are stressing more this year than they have in previous years, and only 13% are stressing less. Out of all the provinces in Canada, though, Saskatchewan seems to be stressing the most at 61%. In terms of age, 55% of those in the age group 18-34 are stressed. 

    Use of Financial Products from 2022 to 2023

    When we surveyed Canadians, we found that many more are using financial products for purchases, so much more than they were last year. Let’s look at how much. 

    Type of Financing for Large Purchases% of Canadians Using More% of Canadians Using Less
    Credit Cards29%22%
    Personal Loans10%46%
    Buy Now Pay Later12%44%
    Savings (For Holiday Spending)32%25%

    Two interesting statistics to add to these stats are:

    • 18-34-year-olds are using Buy Now Pay Later services 22% more than older generations.
    • Albertans are dipping into savings more than other Canadians, with a percentage of 39% instead of 32%, which is the national average. 

    Best Way to Fund Holiday Expenses

    While the best way to pay for your holiday expenses is by using what you have and avoiding debt, that isn’t always an option. The cost of everything increases due to weather and supply chain issues, so you have to make the best financial decision for you. If you do decide that borrowing funds is something you need to do, then it’s important to understand which financial product will work best for your financial needs and how it will affect you.

    Credit Cards Vs Personal Loans

    When people look to fund their holiday expenses, the two most common ways they do this are with credit cards and personal loans. While both of these forms of funding have advantages and disadvantages, personal loans tend to be the financial option that affects you the least.

    When you take out a personal loan, you can only use those funds once. You can’t use them again once they’re paid off. You have set payments that you make based on your payment schedule, and every positive payment helps your credit score. While personal loans can be one of the most difficult forms of lending to get approved for, they’re the most powerful when it comes to your credit report. They also have significantly lower interest rates than credit cards. 

    While credit cards are great for short-term loans, they can end up costing you a lot of money if you aren’t careful. They can also damage your credit score if they aren’t used properly, even if you make your monthly payments on time. This is because credit cards are a form of revolving credit. This means that once you pay off an amount used, you can use it again. In order to increase your credit score, you want to keep your credit card within 0% to 35% of your available balance. Higher balances can not only reduce your credit score but cost you a lot in interest since credit card interest is compounded daily, not a set rate based on your total amount borrowed like a personal loan. 

    How to Pay Off Your Holiday Debt

    How you pay off your holiday debt is based on which financial products you used to incur the debt. If you use a credit card, there are a few different ways that you can pay it off and reduce your debt. The most common is to set a budget and pay it off. Because interest rates are higher on credit cards, it’s ideal to pay it off as fast as possible.

    Another way to reduce the amount of debt you owe is to apply for a balance transfer credit card. Many of these cards offer promotional interest rates of 0% for the first 9 or 12 months. This allows you to pay off your credit card debt interest-free. 

    The last common option is to take out a personal loan if you haven’t financed your holiday spending this way already. By paying off your credit card debt with a personal loan, you're reducing the amount of interest you’re paying, as well as setting up payments to pay off the loan by an agreed-upon date. With most personal loans, you can also pay off the loan in full with no extra fees or penalties. 

    How Spring Financial Can Help This Holiday Season

    At Spring, we understand that sometimes you need some extra funds. This is where we can help. We offer personal loans starting at just 9,99% on amounts ranging from $500 to $35,000. We also report to the credit bureaus, so as you take control of your finances, you’re also increasing your credit score. The application process is completed online, and you can get your funds as soon as today. Apply now to see what you qualify for.

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