It is without doubt that this upcoming holiday season is looking more positive for most people than it did last year where we were bound by many restrictions and shutdowns. It is our second run through Covid in December, and although the world looks different, the spirit of the holidays is running bright again throughout small towns, large cities as well as people’s homes. A long-awaited desire to return to holiday markets, festivals, light displays, cocktail parties, shopping malls and many other festivities in person has been the consensus indeed, but what does that translate into financially?
Have societal behaviours and habits of online shopping become the predominant method at the present time? A recent survey conducted in the early fall shows that 41% of Canadians plan to shop online vs 59% who plan to shop in person throughout this holiday season. Interestingly, these numbers vary among different demographics as baby boomers will spend and shop differently versus Gen X or Gen Z.
Overall spending is expected to be 33% higher than last year however still 19% lower than pre-pandemic times. As such, is there any planning around spending or embracing the idea of shopping budgets? As mortgage professionals, what we see habitually each year is overspending leading to post-holiday debt and financial exhaustion as a result of this unequivocal pressure of having to make the holidays perfect for everyone. Notably, there are ways to proactively curb this in order to avoid a financial hangover you may be surprised with come the new year.
Tips on Holiday Budgeting
Being mindful of online door crasher sales which can lead to increased frivolous purchases.
Beware, a considerable increase in the email inbox from retailers with promotions and discount codes may invite further unplanned spending.
Many online retailers are not solely Canadian, thus double checking if you are paying in US funds vs Canadian funds, also factoring in substantial shipping and duty costs may have you re-evaluating whether or not it’s actually worth the spend.
Setting budgets for each gift in advance can assist with keeping numbers inline.
Looking to host this year’s holiday dinner or cocktail party? Keeping a tight shopping list can ensure you stay within budget, while maintaining a tasteful but simple spread.
Consider a pay it forward initiative or charitable endeavour with family in lieu of gifts.
Homemade gifts, baked goods and sentimental gestures can cost very little but go a long way.
Factoring In Financial Impact
With the considerable increase in spending this time of year, particularly using various credit facilities, it’s important to remember the scheduled payment due dates in order to avoid late payments resulting in distressed credit. This can significantly impact the mortgage approval process particularly around rates and can add considerable costs over the term of the mortgage and throughout the credit rehabilitation period.
In one of our previous blogs, we outlined the “ABCs of Private and B Lending” and the impact poor credit management can have on one’s mortgage portfolio. While we have the expertise to assist Canadians in dire situations, it’s prudent for us as professionals to continue educating our clients in order to avoid these situations going forward.
Rest Assured….
Despite roller coaster habits of spending and with changes in pandemic influenced human behaviour, the one constant is knowing you have trusted Mortgage Professionals at Mortgages.ca who can assist with any debt consolidation, refinances and dependable guidance through all situations going forward. Don’t sweat it out too much, relish in the time with friends and family and enjoy the holidays!
*Survey resource – https://www.pwc.com/ca/en/industries/consumer-markets/2021-holiday-outlook-canadian-insights.html
