Retailers are cautiously optimistic about Black Friday and holiday season sales: Retail analyst
Young Canadians feeling the pinch of inflation want to splurge on holiday gifts for loved ones — so they're cutting back on other festive costs instead.
Despite the high cost of living, retail experts say the younger generations are the most likely to splurge on presents this year.
"They're really looking forward to treating their loved ones as well as actually treating themselves," said Suzana Colic, a retail consultant with Accenture Canada.
To accommodate the extra spending, already-tight budgets likely need to be reviewed.
Some of the first areas young Canadians might want to cut spending this holiday season are dining out, entertainment, and subscription services, Colic said.
Another way to cut back is on electricity bills, she said. As well as turning off unnecessary lights and unplugging electronics not in use, try limiting seasonal non-essential energy use by reducing the number of decorative Christmas lights.
"[Young Canadians can be] strategic and mindful of spending against some of these non-essentials, in order to create the space to spend on loved ones for this upcoming holiday season," said Colic.
Another way to save is by using online marketplaces, such as Vinted or Depop, to buy and sell clothing, accessories and home goods at a discounted price, she said.
Then there's the other side of the equation.
In addition to cutting back on spending, Colic said young people may offer to work extended hours or pick up a side hustle, such as babysitting or dog walking, to earn some extra cash.
Another way to save is by setting realistic financial expectations around the holidays with friends and family.
Open and honest conversations about finances ahead of time help.
In a holiday spending report, PayPal found that those between the ages of 18 and 24 were three times more likely to split the bill on holiday expenses compared to Canadians aged 65 and over.
By pooling money together, it may be possible to buy that more expensive gift for a loved one or splurge on a holiday gathering at a reduced price.
The data, which comes from 2,000 Canadians surveyed during the last week of October, also found that 94 per cent of generation Z are comfortable asking family and friends for money.
"It shows that they don't find money conversations awkward," said Malini Mitra, a PayPal spokeswoman.
"This generation is becoming more transparent and honest with their finances, and there are offering to support to another when they can."
Mitra said that there is a lot that older generations can learn from the normalizing of discussions around sharing money and leaning on one another during challenging times.
"We can certainly emerge from these situations stronger together."
This report by The Canadian Press was first published Nov. 21, 2022.