Canadians cut holiday shopping, but many of them expect to exceed their budget: CIBC banking survey
Tips on how to avoid overspending and a January headache
TORONTO, Dec. 16 2, 2016 /CNW/ - According to a new CIBC (TSX: CM) (NYSE: CM) survey, Canadians plan to spend, on average, close to $600 for their holiday shopping this year, down 8% from last year. However, more than half (51%) expect to go over budget in holiday excitement.
“Risk comes from unwrapped expenses — entertainment, travel, and even mouth-watering Boxing Day sales and New Year’s festivities,” said David Nicholson, vice president, CIBC Imperial Service. “If not vigilant enough, these unforeseen expenses can derail the budget, even for the most diligent among us, and lead to tighter finances, stress, and even regrets when it's time to pay the bills. »
Here are some of the key findings from the survey:
Millennials are more likely to overspend
Millennials are more likely to buy on credit than people aged 35 or older (60%vs. 52%) and one in five ( 20%) expects to feel some guilt when she has to pay her credit card bill. They also tend to stay in debt longer. Nearly half (48%) carry a credit card balance for more than a year, and 18% say they can't remember the last time their balance was zero.
The survey also shows that nearly two-thirds of Gen X Canadians (aged 35-54) who have credit card debt carry over a balance for a year or more, or don't know how long it was. last time their balance was zero.
“While most Canadians use their credit cards responsibly, it's very easy to get caught up in the holiday spirit and get carried away with spending,” said Nicholson. “The best way to stay in a good mood is to spend within your means. »
The survey also shows that the risk of going over budget during the holidays exists for all Canadians, regardless of age or income. “In fact, more than half (52%) of high-income Canadians go over budget,” he added.
“We are all under pressure during the holiday season. At this time of year, it is very important to discuss with your family and friends expectations regarding spending on gifts and entertainment. The holiday season is a time of emotion and tradition. The more you can manage expectations, the less stress you will experience and the better off your budget will be. »
Tips to avoid financial trouble after the holidays:
- Rethink expectations- All families and traditions are different. Ask family and friends to set spending limits, or get creative and establish new traditions to replace expensive outings and gift shopping.
- Track your spending and double check it - Be aware of what you spend in-store and online. Don't forget gifts, evening wear, tips, entertainment and travel expenses. Use tracking tools, like CIBC CreditSmart, to help you avoid overspending.
- Go Prepaid - Set a fixed spending limit with a reloadable prepaid card. The CIBC SmartTM Visa* Prepaid Card can help you stick to your budget by allowing you to set daily spending limits.
- Host at Home - Avoid hefty restaurant bills by entertaining family and friends at home. Consider splitting the cost of food and beverages by offering your guests to bring their own meal or contribute to the meal and reduce costs even further.
- Use credit wisely- If you pay with a credit card, use the one that best suits your needs. Even though paying with a credit card offers you significant benefits and bonuses, watch your money closely and avoid late fees with alerts sent to your phone or email. This will help you take advantage of benefits and bonuses and avoid carrying over balances and paying interest charges.
- Ask for advice- If you're worried about your holiday bill coming in January, don't worry: you're not alone. Speak to an advisor who will help you create a budget to manage your cash flow and get you on track for 2017 so you can take on only debt you can manage and pay off easily.
Average amount Canadians say they plan to spend on holiday shopping this year, by region:
| 2016 | 2015 | |
| All Canadians | $597 | $652 |
| British Columbia | $529 | $557 |
| Alberta | $688 | $649 |
| Manitoba and Saskatchewan | $647 | $709 |
| Ontario | $670 | $759 |
| Quebec | $406 | $450 |
| Atlantic Canada | $803 | $867 |
Average amount Canadians say they plan to spend on holiday shopping this year, by age group:
| 2016 | 2015 | |
| From 18 to 34 years old | $399 | $464 |
| 35 to 54 years old | $670 | $706 |
| 55 years or older | $693 | $758 |
| The mood Canadians expect to be in in January, a when the holiday season is over:
| 2016
|
| Happy - I stayed within my budget and paid for all my expenses | 46% |
| Satisfied - I went slightly over my budget, but I can cut some expenses to pay off my debts in a month or two | 38% |
| Slightly Guilty - I haven't really followed a budget and expect it to take a while before to get me back on my feet | 10% |
| Hard - Argh! I've been swept up in holiday excitement and dread the arrival of my bill | 3% |
| Indifferent - I don't really follow my holiday shopping, debt is part of my life | 3% |
How Canadians usually pay off their credit card balance:
| The entire balance | 57% |
| Amount higher than the minimum payment, but I carry a balance over to the next month | 23% |
| The minimum payment, I carry over a balance to the next month | 4% |
| I pay back what I can, when I can | 2% |
| I don't know | 1% |
| Not applicable | 13% |
How long do Canadians carry a credit card balance (if any)?
| From 1 to 3 months | 20% |
| From 4 to 6 months | 13% |
| From 7 months to a year | 12% |
| 1 year or more | 33% |
| I can't remember the last time my balance was zero | 22% |
2016 Holiday Shopping Survey Disclaimer:
From December 2-4, 2016, an online survey was conducted among 1,516 Canadian adults randomly selected from Angus Reid Forum registrants. The margin of error, which measures sampling variability, is 2.5%, 19 times out of 20. The results were statistically weighted according to level of education, age, gender and region (and, in Quebec, language), based on census data, so that the sample is representative of the entire adult population of Canada. Discrepancies in or between totals are due to rounding.
About CIBC
CIBC is a leading Canadian financial institution with global reach, serving 11 million personal and business customers. Through its three main business units, Retail and Business Banking, Wealth Management and Capital Markets, CIBC offers a full range of products and services through its extensive network of electronic banking, banking centers and offices across Canada, the United States and around the world. You can find other news releases and information about CIBC at www.cibc.com/ca/media-centre/ or on LinkedIn (www.linkedin.com/company/cibc), Twitter @CIBCBank, Facebook (www. facebook.com/CIBC) and Instagram @CIBCnow.
SOURCE Canadian Imperial Bank of Commerce
For further information: Caroline Van Hasselt, Director, External Communications, 416 784-6699 or [email protected]
Related Links
http://www.cibc.com
