74% of Canadians slash holiday budgets — rising living costs to blame, says Spring Financial survey

A new survey by Spring Financial reveals that nearly three-quarters of Canadians are reducing their holiday spending due to rising living costs. The annual 2024 Holiday Survey, conducted among 1,515 Canadians, highlights holiday spending trends that indicate a shift toward alternative gifting strategies and tighter financial planning. With inflation continuing to erode purchasing power, many Canadians are prioritising affordability over luxury, reshaping festive traditions in response to economic challenges.

Financial strain reshapes holiday spending

The survey found that 74% of respondents—including 79% of Gen Z and millennials—are scaling back their holiday budgets. This trend is amplified by the fact that 38% of Canadians report feeling more financial stress about gift-buying this year than in 2023, a marked rise from 13% last year. As a result, many Canadians are seeking ways to make the holidays memorable while staying within their financial limits.

Spring Financial President and CEO Tyler Thielmann observed that while rising living costs have created added pressure, Canadians are demonstrating resilience through thoughtful spending strategies. He highlighted a significant decline in the use of high-risk options such as buy-now-pay-later services, pointing to a collective effort to minimise holiday debt. “Canadians are showing creativity and caution, which is key to weathering financial strain during the festive season,” Thielmann remarked.

Generational divides in financial stress

The survey underscores a generational divide in financial experiences, with millennials (64%) and Gen Z (66%) identifying gift-buying as the most stressful aspect of the holiday season. Furthermore, 31% of all Canadians—and 38% of millennials—indicated they cannot afford holiday gifts this year. Among younger generations, financial pressures are compounded by broader economic challenges, including rising rents and student debt.

In response, many younger Canadians are adopting alternative gift strategies to maintain the spirit of giving without overspending. Homemade gifts, shared experiences, and personalised gestures are becoming popular choices among 71% of Gen Z and 58% of millennials. These strategies not only help manage costs but also reflect a broader cultural shift toward sustainability and meaningful gifting.

Debt management strategies gain traction

Despite economic challenges, Canadians are adopting improved strategies to manage holiday debt. Only 13% of respondents plan to use buy-now-pay-later services, a sharp decline from 44% in 2023. This significant drop signals an increased awareness of the risks associated with high-interest payment schemes. Additionally, 75% of respondents aim to pay off holiday debt by the end of January, with 46% of Gen Z expressing optimism about settling debts by December’s end.

Thielmann praised these holiday spending trends as a positive sign of financial responsibility. He encouraged Canadians to continue prioritising sustainable habits, emphasising that “avoiding unnecessary debt is not just about surviving the holidays—it’s about starting the new year on stable financial ground.”

Regional variations in holiday spending habits

Atlantic Canada emerged as the region experiencing the highest financial stress, with 66% of respondents citing gift-buying as their primary concern due to rising living costs. However, this region also showcased a strong commitment to alternative gift strategies, with 62% planning to explore options beyond traditional purchases. Homemade gifts, shared experiences, and even charitable donations were among the most popular choices, reflecting a broader shift toward cost-effective and meaningful holiday celebrations.

British Columbia, Alberta, and Ontario exhibited varied financial behaviours, with residents exploring creative solutions to ease holiday stress. In British Columbia, for example, rising housing costs have led many to consider personal loans as a temporary measure for festive spending. Similarly, Albertans and Ontarians have embraced thoughtful, experience-based gifting, focusing on shared activities rather than physical items. Across Canada, these adaptive behaviours highlight a collective effort to navigate economic challenges without sacrificing the joy of the holiday season.

Survey methodology

These insights were derived from a study conducted by KT Communications between November 15 and November 19, 2024. A representative sample of 1,515 Canadians, members of the Angus Reid Forum, participated in the survey. Results carry a margin of error of ±2.53 percentage points, 19 times out of 20. Conducted in both English and French, the survey offers a comprehensive view of how Canadians are adjusting their holiday spending in response to economic pressures.