Gift spending trends
The holidays might be expensive. In addition to gifts, people spend money on travel, food and drinks, special events, and annual charitable donations. Still, gift-giving stays a priority for Canadians of all ages. Despite rising costs Spending on gifts increased by 10% in comparison with last 12 months, a mean of $661 in 2025.
While Canadians share a desire to present holiday gifts, there are clear differences in the best way generations approach their budgets.
About 70% of individuals ages 55 and older plan to spend in regards to the same amount on gifts from their regular income and savings as they did last 12 months. However, the story is different for Generation Z and younger Millennials. From 18 to 34 12 months olds 58% expect to depend on their bank cards for gifts. Worryingly, 40% of those respondents have a better gift budget than last 12 months.
presented
Best cashback card with easy approval
SimplyCash card from American Express
Earn a minimum of 1.5% money back on all purchases and three% on purchases made in US dollars. Redeem rewards each time you wish.
GO TO WEBSITE
Interest rates:
21.99% Purchase, 21.99% Cash Advance, N/A Balance Transfer
Welcome offer:
Value $100
Earn a 5% money back bonus on all purchases (as much as $2,000 in purchases). This is along with your every day cashback earning rates. That’s as much as $100 in bonus cashback.
presented
Silver: Best cashback card
CIBC Dividend Visa Infinite Card
Get 4% money back on gas and groceries and save on the pump with exclusive fuel discounts.
GO TO WEBSITE
Interest rates:
21.99% Purchase, 22.99% Cash Advance, 22.99% Balance Transfer
Welcome offer:
Value of $250
Join and earn over $400 in value, including annual fee reimbursement for the primary 12 months.†
presented
Bronze: Best cashback card
SimplyCash Preferred Card from American Express
Get a minimum of 2% money back on all of your purchases – one in all the very best basic rates in Canada.
GO TO WEBSITE
Interest rates:
21.99% Purchase, 21.99% Cash Advance, N/A Balance Transfer
Welcome offer:
Value of $250
Earn a ten% cashback bonus on all purchases for the primary three months (as much as $2,000 in purchases). If you make a purchase order within the thirteenth month, you will also receive a $50 statement credit. This can lead to a bonus value of as much as $250 in the primary 13 months.
Li Zhang, CPA Canada’s head of economic literacy, has some ideas as to why that could be. Older adults simply have more practice managing their funds. You could also be higher at establishing solid savings habits, spending limits, and budgets. Zhang points out that vacation spending is “a good example of budgeting in practice – spending based on available funds.”
Generation Z and younger Millennials feel this They have the identical spending pressures but lack financial experience from older adults. “Younger Canadians may feel social or emotional expectations to make the holidays memorable – which creates added pressure that may lead to turning to loans as a quick fix,” says Zhang.
It’s no surprise that 56% of young respondents said they feel more stressed about holiday spending.
How a $661 purchase can turn right into a $750 bill
If you pay with money, the transaction will probably be accomplished on the checkout. But with a bank card, you may easily find yourself paying interest – lots of it. If you don’t pay the complete invoice amount throughout the payment deadline, interest will accrue in your bank card. This is the time between the top of your monthly billing cycle and your due date, normally between 21 and 30 days. The problem is that bank cards make it easier to overspend, leaving you without the cash to repay the balance in full.
The rate of interest on a mean bank card in Canada (excluding special low-interest products) ranges from 19.99% to a whopping 25.99%. To put that in perspective, a $661 fee charging 19.99% interest for six months would add as much as a balance of about $730. For a card with a 25.99% rate of interest, the overall amount can be around $750, almost $90 greater than the acquisition price.
The article continues below promoting
X
Buy now, pay later (BNPL) deals could seem tempting because they often don’t charge interest or fees, but they ought to be used with caution. BNPL is a short-term loan that permits you to break a purchase order into small, fixed payments. But like bank cards, it is simple to overspend, and missing payments can lead to fees or hurt your credit rating.
Budgeting for the vacations
The best strategy to avoid a costly holiday hangover is to persist with a sensible budget. If you should have a good time the vacations inside your means, listed here are some practical tricks to make sure that you do not overspend.
- Budget upfront. Budgeting is not exactly celebratory, but it surely helps you make informed financial decisions. Figure out what you may realistically afford – and persist with it. If you are a vacation self who loves shopping, consider opening a savings account to avoid wasting for next 12 months. Pro tip: Shop with money to avoid hasty justifications for little extras.
- Shorten your list. If your income and savings don’t allow for something for everybody, limit the target market on your purchases. For example, you would possibly resolve to only buy gifts for kids this 12 months. Group gifts might be reasonably priced and meaningful. For example, as an alternative of a small gift for every colleague, consider a potted plant for the office.
- Buy second hand. Thrift stores is usually a treasure trove and infrequently support local services equivalent to the hospital charity or an emergency shelter. Consider online marketplaces instead.
Sticking to a budget doesn’t make you the Grinch, it does mean a happier recent 12 months. Plan your holiday budget upfront, prioritize spending and get creative together with your donations.
Get free MoneyDown financial suggestions, news and advice in your inbox.
Read more about saving:
