More Canadians are entering the holiday season feeling financially squeezed this year, with consumers favouring more intentional spending as a result.
A recent survey from Money Mart (1) found that 78% of Canadians say inflation will affect their holiday spending in 2025, and 37% expect to spend less than they have in the past.
Among those cutting back, most plan to reduce spending on gifts, while many are trimming retail purchases (56%), dining (48%) and entertainment (45%). While 81% of Canadians consider themselves to be confident budgeters, 43% are worried about balancing rising day-to-day costs with holiday obligations.
"Canadians are financially savvy, but the holidays can stretch even the most careful planners," Peter Kalen, CEO of Money Mart, said in a statement. "It’s a tough time of year with added expenses and the pressure of gift giving… and when unexpected costs like a car repair or home emergency pop up, it can make things even more stressful."
Don’t Miss
- Want to retire with an extra $1.3M? See how Dave Ramsey’s viral 7-step plan helps millions kill debt and build wealth — and how you can too
- A new nationwide survey of financial leaders warns Canada may face a recession in six months — protect your wallet with these 6 smart money moves ASAP
- Warren Buffett used these 4 solid, repeatable money rules to turn $9,800 into a $150B fortune. Here’s how to apply them to your own life
Canadians are rethinking how they spend this year
Younger Canadians are feeling the strain most sharply. The Money Mart survey found that 53% of Gen Z and 48% of Millennials are concerned about managing both holiday and regular expenses, compared with 34% of Boomers.
Other recent surveys show similar spending patterns. A new report from Harris & Partners (2), based on 1,820 households, found that 62% of Canadians say they are not financially ready for Christmas, and 71.5% expect to cut back compared to last year. Additionally, more than half say they feel anxious about affording the season.
Households appear to be adapting by shifting away from more expensive traditions. Harris & Partners notes that many families are scaling back on gifts and prioritizing experiences over excess — a practical response to higher living costs.
Earlier this fall, PwC Canada also reported that consumers plan to be more selective with their spending (3), with younger shoppers in particular scaling back on gifts and discretionary purchases.
Read more: Here are 5 expenses that Canadians (almost) always overpay for — and very quickly regret. How many are hurting you?
Why a simpler holiday is helping some families find more meaning
For many Canadians, the financial squeeze is leading to a comprehensive change in how they approach the holiday season. Becky Field, 34, of Ottawa, told CBC News (4) that buying a second car so her husband could get to work forced her to rethink gift-giving altogether.
"With groceries at an all-time high, as well, gifts didn’t really make it into our budget," she told the news outlet. Field’s family now focuses on thrifted or second-hand gifts sourced through neighbourhood “buy nothing” groups. Her three young children have even made a tradition of picking out gently used stuffed animals from a thrift store to gift to one another.
Field says the change has shifted the tone of the holidays in an unexpectedly positive way. "The economic situation we’re in has forced me to get creative with gift-giving, but in turn, has reminded me what these seasons are really about," she said.
Across the board, Canadians are approaching the holidays more cautiously this year. Inflation, grocery costs and stretched household budgets are prompting many to scale back and reprioritize. However, some have found that choosing lower-cost ways to celebrate might actually bring a bit of the good old Christmas spirit back into the season.
What To Read Next
- Boomers are out of luck: Robert Kiyosaki warns that the ‘biggest crash in history is coming’ — here’s his strategy to get rich before things get worse
- Ray Dalio just raised a red flag for Americans who ‘care’ about their money — here’s why Canadians should limit their exposure to U.S. investments
- I’m almost 50 and don’t have enough retirement savings. What should I do? Don’t panic. Here are 6 solid ways you can catch up
- Here are the top 7 habits of ‘quietly wealthy’ Canadians. How many do you follow?
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Newswire (1); Harris & Partners (2); PwC (3); CBC News (4)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.