Why I’m Not Surprised Canadians Overspent This Holiday Season

I told myself I would spend less on gifts this year. I made a budget, set a per-person price cap, resolved to spread my shopping over multiple months and pounced on as many deals as I could.

Recipe for success, right? As someone who writes about personal finance for a living, I should know better than most how to safeguard my budget during the holidays. Except — I still overspent. I blew through my per-person caps, one impulse purchase at a time. And I know I’m not alone.

Canadians who purchased gifts this past holiday season spent, on average, $828 for those gifts — $120 more than the $708, on average, those who planned to purchase holiday gifts said they expected to spend back in October 2025, according to a recent survey of over 1,000 Canadian adults conducted by The Harris Poll on behalf of NerdWallet Canada.

So what happened between October's intentions and January's credit card statement?

Gift-giving mental gymnastics: How I talked myself into buying way too much

Here’s what my brain sounded like in the lead-up to the holidays:

“This Star Wars mug is way better than what I already bought for my Uncle Bruce. How can I pass it up? It’s on sale!”

“A friend of the family is coming for Christmas dinner. I should get her something so she doesn’t feel left out when we open gifts.”

“I don’t really want to buy two air fryers, but this ‘buy one, get one half off’ deal is so good. I’m basically saving money in the long run.”

“This splurgy event ticket puts me way over budget for my mom. But she’ll love it! And I want to get her something special.”

I can testify that the gift-giving anxiety spiral is real. But it rarely operates alone.

The retail landscape is designed to make you spend more

I was sure I’d set myself up for staying-within-my-budget success, but I still spent more than I wanted to this past holiday season. Yes, I overspent because I was worried people would feel overlooked if I didn’t get them something thoughtful enough. Or expensive enough. Or something enough.

And I’m not alone in this: 17% of Canadians who purchased gifts this past holiday season say that social or family expectations impacted the amount they spent on gifts for the holidays. But my emotionally-charged overspending was made worse by predatory marketing tactics.

Here’s what’s working against even the most budget-savvy shoppers — tactics I can name and explain, but apparently still fall for:

Beyond insidious retailer tactics, there’s another factor that inflated gift budgets this past holiday season: 20% of 2025 holiday shoppers bought more ''Made in Canada'' gifts, which were more expensive than foreign-made alternatives.

Canadian-made goods, predatory marketing, emotionally-loaded gifting, inflation — they all contribute to busted budgets. In fact, 2025 Canadian holiday shoppers spent $120 more, on average, than they thought they would on gifts in 2025. This, despite money-saving steps to keep costs down: 33% of 2025 holiday shoppers only shopped during sales, deals, and promotions, 23% used loyalty points or cash back to pay for holiday gifts and 11% made or crafted gifts themselves.

Overspending during the holidays isn’t a character flaw or moral shortcoming. The emotional and financial minefield of gift giving is tough to navigate. Just ask my second air fryer. But now that January is here, the bills have arrived. It’s time to evaluate and make a plan.

Dealing with January’s financial fallout — and preventing a replay next holiday season

Whether you overspent by $50 or $500, the game plan is the same: tackle what you owe, study up on retailer tactics and, seriously — reconsider the gift exchange.

Pay down holiday debt before it snowballs

Did checking your credit card balance after the holidays make you wince? Same. But debt-induced shame isn’t going to pay back what you owe.

The avalanche repayment method builds momentum by prioritizing high-interest debt, like credit card debt. Don’t neglect your other debts, though — make sure you continue to meet at least the minimum payments on whatever else you owe. Pay as much as you can afford towards your debt with the highest interest rate. Once it's paid off, you target the debt with the next highest-rate. Rinse and repeat.

Beyond this, you might want to consider a balance-transfer credit card. These cards offer rock-bottom interest rates on balances transferred from other cards for a set promotional period — typically six to 12 months. Basically, you get an interest-free window of time to pay down your balance, which means every dollar repaid stretches that much further. Pay attention to the promotional period, though, because after it ends, the card will revert to its standard interest rate — usually closer to 20%.

Stay wise to marketing tactics

Take note of any scarcity marketing, BOGO traps or bundling ploys that hooked you this year. Next holiday shopping season, see if you can make a game of identifying and steering clear of the retailer gimmicks. Ask yourself: “Would I buy this if it wasn’t on sale?” If the answer is no, walk away.

To get ahead of the urgent online ‘deals’, I plan to implement a 24-hour cooling-off period before I complete quick-turn transactions. Basically: leave the item in your cart overnight, sleep on it, and decide the next day whether you actually want to buy it. Adding this cooling-off period to my arsenal should help me reduce scarcity-mindset impulse buys.

Just remember: retailers are banking on you being too time-crunched and overwhelmed to clock the manipulation. And they’re right to bet on it: 7% of 2025 Canadian holiday shoppers say their lack of planning caused them to overspend/overbuy on gifts. Planning ahead isn’t just about budgeting — it’s about having the bandwidth to recognize the tactics working against you.

Do what my family did — nix the gift exchange

This year, my mom did something I’d quietly hoped someone would do for years: she spoke up. That side of my family has always done a big gift swap. Everyone buys for everyone. But this year, Mom suggested that the behemoth gift exchange had gotten out of hand. And guess what? Everyone agreed.

You should have seen the family chat. Message after message of: “yesssss,” “so true,” “100%.”

We decided that next holiday season, instead of gifts, we’d show up with ideas. On Christmas Day, everyone will pitch an experience for us to do together, Dragon’s Den-style, complete with a cost analysis and logistics, and we’ll vote on a winner. A special dinner out. An aquarium visit. A theme park day!

Not only will contributing to a group experience be less expensive than buying gifts, but it also eliminates the cognitive load of list-making, shopping and wrapping. And, if you’re me, the utterly mind-numbing task of figuring out what to do with a second air fryer no one needs.

If your family is wading through a sea of obligation gifts during the holidays, propose an alternative. Only 20% of 2025 holiday shoppers say they managed gift expectations with family and friends ahead of the holidays this year. That number could be higher. You might be surprised by how many people are ready for a new tradition.