Why Holiday Shopping Is More Expensive Than You Think

In the last couple of months there have been a plethora of surveys on how much Canadians spend on Christmas shopping.

Unlike our neighbours to the south (who are spending less), we apparently are more confident about our economy and plan to increase spending this year by 2 to 3.5 percent.

Related: Saying, “I Can’t Afford It”.

Holiday Shopping: How Much Do We Spend?

Polls show an average of $899 (Scotiabank) to $1,610 (BMO) planned for gifts alone, and total holiday spending of $854 to $2,183 for gifts and other incidentals (Deloitte Canada).

I sometimes wonder if people take into account all the extra spending they do at this time of year.

Gifts – This is the obvious first item on our holiday budget list.  But, what a list it can be!

We buy gifts for:

  • Our children, spouses and partners, immediate and extended family
  • Workplace “secret Santas” (I once pulled the name of someone I’d never even heard of, let alone knew.)
  • Our employer.  This must a new trend.  It used to be that a company gave its employees holiday gifts and bonuses.  My husband used to get an annual, well received Safeway grocery voucher (this was before gift cards).  Being a bank employee, I received the heart-felt thanks of the current president for all my hard work during the year, which resulted in his $5 million bonus (although I did once receive a bottle of home-made wine from our janitor – don’t ask!)
  • The mail carrier, newspaper deliverer, doorman, school bus driver, teacher, house cleaner, babysitter, and neighbours
  • Staff at the bank, library, doctor’s office, and hair salon get the obligatory box of chocolates
  • Hostess gifts for the many parties and open houses we attend

Restaurant/Fast Food meals – so we can keep on shopping and to pacify the kids for a time

Greeting cards

Annual holiday photo package

Visit with Santa (kids and pets)

Postage and shipping: to send gifts, cards and photos to loved ones who live out of town

Travel expenses: road trips to airline tickets, to get you and your family out of town.

Parties and entertainmentworkplace, neighbourhood, friends and family

You need:

  • New clothes for the festivities, something sparkly or the latest fad of ugly Christmas sweaters – and everything in between
  • Accessories, including hairdo and festive finger nails
  • Cab fare in case you overindulge
  • Groceries for the big meal as well as snacks, finger food, and liquor
  • Baking supplies

Home décoreither new items, or replacements for those worn out

Some people spend hundreds of dollars on their outside light shows, alone.

Charitable giving – Nine out of 10 people feel good about giving to charity at this time of year (Ipsos Reid).

Not only do we send a cheque to our favourite charity, we like to give to:

  • Salvation Army Santas
  • Toy and food drives
  • Christmas hampers
  • Adopt-a-Family
  • Buy a goat

These are all worthwhile, feel-good, causes.

And don’t forget a new calendar.

Final thoughts

The Scotiabank survey indicates that almost half of us (49%) have saved enough money for our holiday spending and 41% of shoppers plan to use credit (I’m assuming they will pay off the cards as the bills come in).

Unfortunately, 10% do not have enough to pay for their shopping expenses.

Related: The Burden Of Debt

These last few days are “crunch time” when many of us have a tendency to panic because we can’t find something suitable for the price we wanted to pay.  That’s when we scrap the plan and end up blowing the budget.  If you are part of the 10% that don’t have enough money anyway, your credit problems will exacerbate throughout the year.

I have always had a savings account I use specifically for our annual expenses.  At one time, the period between September (school costs) and January (house insurance) used to be a minefield of extra expenses.  I total them up and divide them into twelve monthly payments.  By January the account is pretty meager, but my bills get paid.  I then recalculate, add an extra 5 – 10% for “just in case” and then start all over again.

How do you handle the extra expenses you have at this time of year?

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  1. Kathy on December 11, 2013 at 7:11 am

    My credit union account is used only for Christmas-related expenses, including all those expenses you listed above. It is like the Christmas club accounts banks used to offer when I was a little girl. This account is funded throughout the year by automatic transfers into it immediately after my husband’s paycheck is direct deposited into our normal checking account. Once the money is gone, then my holiday soending is done as well. Though, I have never yet had it go down to zero because I like to over-fund and under-spend, leaving me a little bit to treat my husband & myself in January after everything has settled back to normal.

    To keep very careful track of my spending from that account, I have a spreadsheet with all the categories already set up, including formulas to calculated the spending. I can tell at a glance how much I have spent for each of my 3 sons, how much I have left to spend for each, and who else I still need to buy for. There is a tab for each year, and it is actually fun to look back thru the years and see what has changed as our 3 boys have grown up thru the years.

    I have been using this system for 20 years, and it has worked fabulously for me. Though the spreadsheet is only 7 years old. Prior to that, I used a small notebook, which got tedious because I had to manually do the calculations. LOL – technology has made me somewhat lazy.

    Also, all those quarterly, semi-annual, and annual expenses? I have another account established just for those expenses. In fact, I refer to it as the QSA account and my husband knows now every dollar in it already is earmarked for something. I say “now” because for a while there he thought it was a pot of gold he could borrow or take from for some stupid new gadget he just had to have! Oh yes, we had many heated “discussions” about it … and I had to cancel the debit card associated with the account. With that account, too, I have automatic transfers set up to fund it. Like you, I increase the amount each year to account for increased expenses. Though I have noticed the expenses are increasing but our paychecks aren’t. But that is a whole other post.

    • Boomer on December 11, 2013 at 8:30 am

      @Kathy: It seems we are very much alike – some people (like my own husband) think I’m too detail oriented tracking all the expenses. He, also, was not allowed to touch the account. I use only one account and from January to about August the balance can build up quite a bit.

      Like you, I used to use a little notebook and now I love my spreadsheets 🙂

  2. Kristilee Parish on December 11, 2013 at 8:30 am

    I just wanted to say I’ve been following your blog for a fair amount of time now and thought I would post!

    Being self employed and also November – April is my slow season Christmas is always a tad stressful. But for two years now I have been putting anywhere from $50-$100 a month into a separate account and when Christmas rolls around I always have nothing to stress about as long as I stick to my budget!

    • Boomer on December 12, 2013 at 11:10 am

      @Kristilee Parish: Thanks for joining in the discussion. It can be more challenging to put aside funds when you are self employed, but it seems like you are managing well.

  3. CanadianDaniel on December 11, 2013 at 8:59 am

    I’m also self-employed, so my wife and I keep a close eye on our holiday spending. Right now I’m wrestling with whether or not to sign up for a basic smartphone plan next year. One enticement: the holiday savings apps out there, including flyer browsing, price comparing and discount/coupon finding ones.

    Do you think that those mobile apps generally lead to more holiday savings via research-educated smartphone users? Or conversely will that online app research simply opens a Pandora’s Box of more seasonal shopping and spending?

    • Boomer on December 11, 2013 at 2:03 pm

      @CanadianDaniel: I have two thoughts on this. If a person knows what they want to purchase, it seems to me that price comparison/discount shopping would be beneficial and certainly be better for the nerves than going from one mall to another.

      If someone is just browsing, though, I think it might be too tempting to overspend when seeing a lot of bargains – and treating yourself to gifts at the same time.

      I have to admit to being technologically challenged though, so I may be off base. Perhaps someone else would have a different opinion.

  4. Money Saving on December 12, 2013 at 11:36 am

    It’s always a very good idea to plan ahead and allocate a certain portion of savings each month for this time of the year. Many folks I know that do NOT do this end up getting themselves into trouble with debt that takes them MONTHS to get out of!

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