TD survey says households shift holiday cash to essentials as cost-of-living squeeze reshapes budgets
Canadians are heading into the holidays with tighter budgets, but younger consumers are preparing to spend more, not less.
A new TD survey finds that more than one in three Canadians (36 percent) intend to cut back on holiday expenses this year, up from 32 percent last year.
Among those reducing spending, 60 percent say groceries and household essentials will account for at least half of their total holiday outlay.
TD frames the shift as a move toward more deliberate choices.
“The holidays may feel different this year, but Canadians are showing that festive spirit isn't about spending big; it's about spending smart,” said Joe Moghaziel, vice president, Everyday Advice Journey, TD.
He added that “creative gift-giving” and “leveraging loyalty points” reflect “intentional choices that keep celebrations meaningful without adding financial strain.”
Cost pressures sit at the centre of the pullback.
Among Canadians cutting back, two-thirds (67 percent) blame the higher cost of living, while 29 percent say they are prioritizing saving.
They report specific tactics: 46 percent are cutting back on gifts for family, 44 percent are dialing down social spending, and 38 percent are scaling back on gifts for friends.
Despite these efforts, most still see a risk of going over budget.
A total of 77 percent admit they are vulnerable to overspending, whether tempted by flash sales, feeling pressured to give "meaningful" gifts, or trying to make the holidays "magical" for their kids.
Only one in four Canadians (24 percent) say they have enough extra income to cover holiday expenses.
Others are relying on more structured approaches, with 26 percent holding dedicated savings for this time of year, 24 percent cashing in loyalty points, and 11 percent taking on a side hustle.
Younger Canadians stand out from the broader trend. One in four Gen Z and Millennials (25 percent and 24 percent respectively) plan to spend more this holiday season, compared with 9 percent of Gen X and 8 percent of Boomers.
Support for local businesses remains strong despite the squeeze on discretionary spending.
Eighty-one percent of Canadians plan to support Canadian businesses this holiday season, and 57 percent of those shoppers expect to put at least half of their holiday budget toward local small businesses.
Gen Z leads here as well, with 71 percent dedicating at least half their budget to local shops, versus 46 percent of Boomers.
"Every dollar spent at a local small business is a vote for your community," said Julia Kelly, vice president, Small Business Banking and Segment Strategy, TD.
She encouraged Canadians to look for ways to support local retailers and artisans, noting that "small changes in spending habits can have a big impact, both for your wallet and for the businesses that help to make your community unique."
