Overspenders in overdrive this past holiday season, shifting into savings mode in 2016 - RBC

Number of overspenders reaches new high
Electronics and toys attract highest expenditures
Rewarding time for points card users

TORONTO, Feb. 12, 2016 /CNW/ - Despite their best intentions, the number of Canadians who are spending more than they expect to each holiday season continues to grow, reaching the highest point in five years this past December (41 per cent vs. 33 per cent in 2011). In fact, more Canadians in every region of the country except Ontario over-spent during the holidays, according to the 2016 RBC Post-Holiday Spending Poll.

The largest expenses per person were on electronics ($172) and toys ($94); spending in these two categories were highest for younger Canadians (aged 18-34), coming in at $228 and $100 respectively. Post-holidays, younger Canadians who overspent are also taking the lead in making plans to help get their finances back on track, compared to Canadians in general, by cutting back on entertainment (41 per cent vs. 39 per cent) lunch and coffee money (41 per cent vs. 29 per cent).

"When we work with our clients to help them save, it's often advice about the small steps that can make the biggest difference," said Maria Contreras, Senior Manager – Savings, RBC Royal Bank. "Bringing a lunch or a thermos of coffee or tea to work can add up to hundreds of dollars in savings over a year."

Younger Canadians who overspent this past holiday season are also taking actions now to try to avoid a repeat performance, including:

  • Setting aside savings specifically for holiday expenses
    (40 per cent vs. 31 per cent for Canadians in general)
  • Creating a budget early in 2016 (35 per cent vs. 24 per cent)
  • Redeeming rewards points for holiday expenses (18 per cent vs. 15 per cent)

"These are all tried and true savings techniques – planning and budgeting to keep track of spending," added Contreras. "You can give yourself one of the best gifts of all by starting right now to find ways to save throughout the year for the extra expenses that come with holiday seasons and other special occasions."

A growing trend among savvy shoppers of all ages is the use of rewards points. RBC's poll found that half (51 per cent) of Canadians who collect points redeemed their rewards this past holiday season to save themselves an estimated $206 each.

"This demonstrates the power of points – savings like these can make such a big difference to your holiday season budget," noted Athena Varmazis, vice-president, Global Loyalty Programs and Rewards, Royal Bank of Canada. "In addition, we found that almost one quarter of Canadians looked for bonus point offers to earn more points over the holidays, which is a great way to collect points for future use. For example, RBC Rewards offers a number of bonus point offers throughout the year, which provide our clients with flexibility and choice when it comes time to do their holiday shopping."

Tips from RBC to help Canadians get a head start on saving for 2016 holiday spending are available here.

KEY REGIONAL HIGHLIGHTS:

  • Atlantic Canadian consumers carried on their tradition as generous gift-givers, leading the country once more as top overspenders (49 per cent compared to national average of 41 per cent), but did so by a much lower average amount – $234 less than last year. 
  • British Columbia consumers led the country in spending less per person in all four gift categories: Toys ($82 vs. $94); Electronics ($141 vs. $172); Entertainment ($48 vs. $64); and Home Décor ($75 vs. $93).  West coast consumers also are the least likely to do anything differently in 2016 to get ready for the next holiday season (50 per cent vs. 44 per cent nationally).
  • Saskatchewan and Manitoba consumers who overspent did so by the most dollars per person compared to other Canadians ($477 compared to $397 nationally).  They also are the most prepared in the country to pare back on day-to-day expenses in 2016 to get their finances back on track (47 per cent vs. 35 per cent nationally). 
  • Quebec consumers kept their overspending to the second lowest level in Canada (39 per cent compared to national 41 per cent nationally).  They also overspent by the lowest amount per person ($355 vs. $397 nationally). 
  • Albertan consumers were the second highest holiday season overspenders in Canada (48 per cent vs. 41 per cent nationally) and in doing so, also spent the second highest amount per person ($452 vs. $397 nationally).  Albertans are also the most prepared to create a budget early in 2016 to help them manage their expenses next holiday season (29 per cent vs. 24 per cent nationally).
  • Ontario consumers kept the tightest lid on their holiday expenses, with the lowest number of overspenders in the country (38 per cent vs. 41 per cent nationally) and overspent by the lowest average amount – $385 vs. $397 nationally – a drop of $130 per Ontario shopper compared to 2014.

FAST FACTS BY AGE AND GENDER: RBC 2016 POST-HOLIDAY SPENDING POLL

1.   OVERSPENDERS

OVERSPENT?

ALL AGES (18+)

18-34

35-54

55+

MEN

WOMEN

Yes

41%

58%

43%

25%

38%

44%

By how much?

$397.00

$362.00

$369.00

$512.00

$477.00

$332.00

2.   REWARDS POINTS SHOPPERS

REWARDS POINTS USERS

ALL AGES (18+)

18-34

35-54

55+

MEN

WOMEN

Redeemed points

51%

59%

53%

42%

47%

54%

Money saved per person

$206.00

$166.00

$222.00

$224.00

$213.00

$200.00

3.    DOING DIFFERENTLY IN 2016 TO GET READY FOR NEXT HOLIDAY SEASON

2016 ACTIONS

ALL AGES (18+)

18-34

35-54

55+

MEN

WOMEN

Setting aside regular savings

31%

40%

33%

21%

28%

33%

Creating a budget early in the year

24%

35%

21%

18%

22%

26%

Redeeming rewards points

15%

18%

16%

10%

12%

17%

Nothing

44%

29%

42%

57%

49%

39%

4.   SAVINGS MOTIVATORS THIS PAST HOLIDAY SEASON

DID NOT OVERSPEND

ALL AGES (18+)

18-34

35-54

55+

MEN

WOMEN

Wanted to keep debts down

36%

38%

39%

33%

38%

35%

Tracked spending with a budget

33%

36%

32%

32%

33%

32%

When money gone, stopped spending

26%

38%

27%

21%

24%

28%

Kept savings goal in mind

13%

22%

14%

9%

14%

12%

Other

13%

10%

13%

14%

12%

14%

About RBC savings and other financial advice and interactive resources
Canadians can access www.rbc.com/savingsspot for free savings advice and resources. In addition, all personal RBC online banking clients can use myFinanceTracker, a no-cost interactive financial management tool, to create and track their budget, savings goals and spending habits. Whether Canadians want to get more from their day-to-day banking, protect what's important, save and invest, borrow with confidence or take care of their businesses, the RBC Advice Centre can help answer their questions. For interactive tools and calculators with customized information covering many facets of personal finance, please visit www.rbcadvicecentre.com

About RBC Rewards
As one of Canada's premier providers of loyalty programs, RBC has the rewards options that help clients get the most from their points. From using points to pay down their credit card balances with Payback with Points, to exciting merchandise, travel and gift cards redemptions, RBC Rewards clients have flexibility and choice in how they use their points. For more information, please visit www.rbcrewards.com

About the RBC 2016 Post-Holiday Spending Poll
These are the findings of an Ipsos Reid poll conducted between January 11 to 15, 2016. A sample of 2,002 Canadians was interviewed from the Ipsos I-Say panel. Quota sampling and weighting was employed to ensure the sample's composition reflects the adult population according to Census information. The accuracy of Ipsos Reid online polls is measured using a Credibility Interval. In this case, the results are accurate to within +/- 2.5 percentage points, 19 times out of 20, of what the results would have been had the entire population of Canadian adults been polled. Credibility intervals are wider for smaller subsets of the population.

SOURCE RBC

For further information: Kathy Bevan, RBC Communications, (416) 974-8820

RELATED LINKS
http://www.rbc.com/

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