According to the results of a recent BMO Financial survey, Canadians are planning to be more frugal during the holidays. This year, spending is expected to hit a three-year low as consumers cut back on entertainment and gifts. The average Canadian plans to spend $1,517 during the 2014 holiday season, down from $1,810 in 2013.
Respondents said that they plan to spend about 19% less on gifts compared to last year, and they intend to cut back on what they spent on entertainment by 25%. Holiday travel spending was one expense that people where people were unwilling to reduce, with the average Canadian setting aside nearly $677 for trips. This is only slightly less than the $689 they budgeted for holiday travel last year.
When asked if they expected to go into debt over holiday spending this year, only 11% said they would do so. Last year's survey revealed that while only 14% of respondents thought they would have to take on debt, 28% ended up taking on an average amount of $963.
“With slower job growth this year, and many new jobs being part-time positions, Canadians are facing weaker income growth heading into the holiday season,” comments Sal Guatieri, senior economist at BMO Capital Markets. “Recent stock market volatility and elevated household debt could also dampen sales.”