5 tips to control your holiday spending

Based on a survey of 4,000 Canadians conducted by PwC, the average consumer will spend roughly $754 on gifts this year.

Inflation will cause a decrease in holiday shopping.  When inflation is high, the cost of the core spending expenses—housing, food, clothing, and transportation—will be much higher. This will leave less room for holiday spending for gifts, entertainment, and travel.

Depending on the individual, the impact will vary. For most, holiday spending will go down, but for the higher-income households, holiday spending may not be adversely affected, and some could even end up spending more.

A reasonable holiday budget depends on who we are talking about. Between holiday gifts, travel, and entertainment, the average Canadian consumer is projected to spend roughly $1,430 during the holidays. This amount jumps to $1,823 for millennials, but will dip below $1,200 for boomers and generation Z.

Budgeting itself is based on personal situations such as personal or family income level, projections of future cash flows, and satisfying necessary needs—mortgage payments, utilities, phone bills and groceries, for example. Being individualistic and specific is a way to show how much care has been put in your holiday budgeting.

1. Budget with some leeway to capture unexpected expenses that sometimes go unaccounted for.
2. Use debit card or cash to make purchases. In doing so, shoppers will not spend beyond the balance of their bank account or cash on hand.
3. For any purchase, do your research on quality, features, price, and delivery.
4. Keep track of spending and try to anticipate expenses. For example, when travelling, try to take into account all the additional costs associated with that travel; parking, entertainment, and meals all add up quickly. This will help maintain a buffer from their spending limit, thus leaving room for those unexpected or additional expenses.
5. Take advantage of sales, promos, and use loyalty programs to reduce cost.

One way to lower the impact of inflation is to lock in prices today for the upcoming year. For example, you could sign up a loved one for grocery delivery for 2023. So, inflation could be a motivator for shoppers to better plan for the future.