The holidays are long gone, but many people are still dealing with the effects of their holiday spending. According to a new Ipsos poll, seven in 10 Canadians said inflation impacted their holiday shopping, and 57% had difficulty covering the cost of gifts.
This overspending continues to negatively impact their lives months later. Over a third of survey respondents said it would take them until April to recover financially.
Inflation Hits Parents the Hardest
The majority of holiday shoppers said inflation affected their spending, but parents with kids were hit the hardest. Over half of the parents surveyed said they blew their holiday spending budget by an average of $614.
It wasn’t just gifts that were hard to cover — parents actually spent the most on experiences with family and friends.
The problem with overspending is that it causes a ripple effect that can last long past the initial purchase. Holiday spending set many parents back, and 49% estimated it would take until April or later to get back on track.
The survey also asked respondents what they would do with an extra $5,000. 35% of all respondents said they would pay down debt, 31% said they would save the money, and 16% said they’d treat themselves with the funds.
How to Lessen the Impact of Inflation
As of January 2023, inflation is at 6.41% — down from a high of 9.06% last summer but still high enough that many consumers are feeling the pinch on their finances. Here are some strategies you can use to meet your daily needs despite inflation:
- Create a budget: Coming up with a budget is the best way to track your expenses and identify areas you can cut back in. Budgeting is always a good idea, but it’s especially important during inflationary periods.
- Buy in bulk: Buying items in bulk can be a good way to save money on household items and non-perishable foods. You can buy in bulk at wholesale retailers like Sam’s Club or Costco.
- Shop around for goods and services: Shopping around is another good way to save money. This may involve comparing prices at different stores or looking for retailers that offer the best deals and discounts.
- Prioritize your spending: If your finances are tight, you need to prioritize your spending to focus on buying the items you really need. Focus your spending on necessary items like food, housing, and healthcare, and look for ways to reduce your discretionary spending.
The Bottom Line
Inflation is slowly beginning to improve, but it’s still causing financial challenges for many consumers. The best way to deal with inflation is by budgeting and prioritizing your spending. By taking steps to track your expenses and cut your discretionary spending, you’ll be better able to protect your finances.