Do you know how to financially prepare yourself for the upcoming holiday season without hurting your long-term financial future? This week on our Live we shared the 2021 holiday shopping trends and our financial tips.
What are some holiday shopping trends in 2021 compared to previous years?
More Canadians start their Christmas shopping early to avoid any possible delays in supply and delivery which might explain how Black Friday has become the busiest shopping day in the year, passing Christmas and Boxing Day.
Canadians are also spending more this holiday season with 80% of Canadians buying gifts this year compared to 74% in 2020. In addition to more Canadians buying gifts, the average Canadian is also expected to spend more this year with $792 on holiday gifts compared to $652 in 2020.
With the implications of COVID, more people are choosing to shop online instead of going to retail stores. Before the pandemic, 72% of holiday purchases were done in-store. In 2021, 37% of shopping purchases are expected to be made online, a jump from %28 from the pre-pandemic era.
What are people spending on this holiday spending?
For the 2021 holiday season, clothing has become the most shopped category followed by food, alcohol, and sweets. The least people choose to buy as gifts are electronics and gift cards. As shopping for clothes has become easier online during COVID, this also assists the changing shopping patterns of choosing to shop online than in-store. However, online shopping can have its downsides. Despite its ease, consumers often spend more than expected online, especially with the online ads companies aggressively push during the holiday season. Preparing a budget for the holiday season can help to avoid getting carried away and stick to your financial plan.
How can you financially prepare for the holiday shopping season?
Know your numbers:
Do you know how much you earn and spend per month? Being aware of your expenses, income, investments, and other cash flow can help you understand your financial situation and give you control about how you can manage your money properly. If you want to spend a certain amount on holiday gifts, you can adjust your monthly spending to make room. Do you have monthly subscriptions you haven’t used in months? Looking over your expense sheets can help you identify expenses you don’t need and save more.
Have a plan on how much you will spend:
Planning how much you can afford to spend this holiday season can help you get all your holiday shopping done without hurting your financial future.
Don’t revenge spend!
You might feel the urge to spend more this year to make up for the lost time in the past years. However, this might hurt your financial future as you might not be able to afford to spend as much as you wish. Although holiday shopping might seem to only include gifts, it actually includes dinners, decorations, events, holiday grocery shopping for a celebratory dinner, and all other activities that relate to celebrating the holiday season. Budgeting while keeping all these in mind can make you create a more realistic spending budget for the holidays and adjust your strategy.
Prioritize quality over quantity:
The holiday season is all about spending time with loved ones, and spending quality time might be more meaningful than doing a high quantity of events and gifts. You can opt-in for family game nights, movie nights, buying takeout from your favourite restaurants with your close friends and more instead of spending high amounts on gifts and festivities.
Be mindful about your financial future:
Holiday shopping might make us forget about planning for the future. However, planning for both the long-term and short-term future is important. Do you have an emergency fund for any uncertainties that may arise? We suggest you save 6 months’ worth of living expenses to provide yourself with a financial cushion for unexpected risk. In addition to this, make sure you identify your long-term financial goals such as for retirement and create a financial plan accordingly.
If you want to learn more about how you can get started with your financial journey to prepare for the holiday season and 2022, book your complimentary 30-minute session with our team now!
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