Today is a day of major sales in Canada and the United States and a kickoff to spending for Christmas and other December holidays. A survey from Manulife Bank suggests a quarter of Canadians spending during the holiday season think the resulting financial stress negatively affects their mental health.

Many will overspend

While four in 10 respondents have budgeted what they plan to spend, more than half of those think they will overspend. Three-quarters of those will use credit cards as their main form of payment. The interest rate on many credit cards in Canada is more than 19 per cent but because they compound the interest daily, it amounts to more like 22 per cent.

Many Canadians will use credit cards for holiday purchases. Unless they pay off totals every month, interest can amount to 22 per and be levied on partial amounts already paid. (iStock)

‘Financial hangover’ goes on

Even though interest rates are rising and eight out of 10 respondents say the holidays have become too focused on spending money, 60 per cent are still willing to go into debt to make purchases during the holiday season.

Manulife says the “financial hangover of the holidays” may last well beyond the holidays. The survey suggests that throughout the year, more than half of Canadians feel debt prevents them from doing theirs they want to do and affects their ability to save for retirement. And four in 10 Canadians with debt think they will never be debt-free.

Spend time, not money, advises bank

Manulife suggests that ‘even the most conservative spender can feel overwhelmed during the holidays, but a little planning can go a long way.” It suggests people write out their costs, think about what’s achievable and necessary and plan to spend more time with family and friends and spend less money.