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Monique Keiran: Gratification and self-restraint lock horns in holiday shopping season

The allure of deals may even ­persuade some people to toss aside budgets.
The allure of deals may persuade some people to toss aside budgets this holiday season, Monique Keiran writes. JUSTIN TANG, THE CANADIAN PRESS

The holiday shopping season is ­underway. With the Black Friday and Cyber ­Monday tradition enticing customers during ­otherwise lacklustre late November, people are exchanging earnings — past, current and prospective — for goods and services.

And with holiday shoppers sprinting out of the gates, we can witness — and ­experience for ourselves — the ­psychological contest this year between the lure of retail therapy and indulgence and the current context of high inflation, household debt and interest rates.

The allure of deals may even ­persuade some people to toss aside budgets. ­Acquisition can provide quick, albeit often shortlived, gratification. Constant ­self-restraint, on the other hand, is ­wearing and dreary.

The Retail Council of Canada’s 2022 holiday shopping survey confirms Canadians are eager to return to holiday traditions despite economic circumstances. Sixty per cent admitted to financial strain, but most said they planned to spend the same amount as last year.

Another 60 per cent said they would be searching in-store this year, not just for deals and perfect gifts but also for the ­holiday shopping festiveness they ­remember enjoying before the pandemic clipped our wings and kept us at home.

“They are looking to recapture that festive holiday spirit,” Retail Council of Canada president and CEO Diane ­Brisebois said in a statement. “The ­challenges of the last few years and ­worries over finances are very present, but Canadians are largely determined not to let this affect their celebrations this year.”

And true to form with pre-pandemic survey results, British Columbians again anticipate spending more than the national average this season — $887, almost $100 more than the national average — grasping at holiday pleasure before 2023 starts its grind.

They are also most likely to budget loosely or not budget at all (46% vs 38% nationally).

This casual attitude towards ­budgeting provides interesting insights into our ­collective sense of denial and lack of financial literacy. British Columbia is a costly place to live. This month, the ­Canadian Centre for Policy ­Alternatives and the Living Wage for Families ­Campaign reported the living wage in Victoria is now $24.29 an hour for ­full-time work. That’s higher than Metro Vancouver’s $24.02 rate.

A living wage is the hourly amount that each of two working parents with two young children must earn to meet their basic expenses (including rent, child care, food and transportation) once government taxes, credits, deductions, subsidies and debt repayment are taken into account.

Both cities’ rates rose almost $4 an hour over last year. It now tops Greater Toronto’s $22.08 living wage, but remains far lower than Canmore, Alta.’s $37.40.

Canadian households are now among the most indebted in the world, owing on average $1.83 in debt for each dollar made in a year, according to Statistics Canada. Our total national household debt is $2.76 trillion.

Although mortgage debt accounts for most of that debt, Equifax reported this summer that average non-mortgage household debt — money owed on credit cards, car loans and lines of credit — has topped $21,128, 2.4 per cent higher than in 2021. Across Canada, total non-mortgage household debt reached $591.4 billion.

That’s not the whole picture, of course. The Statistics Canada data show that 30 per cent of us have no debt at all. Those billions and trillions are concentrated among the rest of us.

Debt is limiting.

The CIBC forecasts that B.C. will face further economic strains in 2023. Quick adjustments to our astronomical home prices and sales, continued rising interest rates and still-high inflation will add to average household debt and possibly to job market corrections.

Of course, the two easiest ways to lower household costs are to reduce non-essential spending and to stick to a monthly budget.

But many British Columbians seem to intend to put both those activities on hold this season.

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