Personal Finance
For Several Reasons, Americans Say They Plan to Spend Less This Holiday Season
With the holiday shopping season now just a few weeks away, it seems that many shoppers won’t be stuffing stockings as full or putting as many presents under the tree this year compared to previous winters. According to a survey conducted by Debt.com, 62% of Americans expect that they will be spending less on typical holiday expenses this year. Additionally, a mere 5% said they intended to spend more than in years past.
As one might expect, many of those predicting a decrease in their holiday spending cited the financial impacts of the COVID-19 pandemic as the reason why. Specifically, 30% said the reduction was due to them losing part of their household income while 11% said they had recently lost their jobs. However, 37% offered an alternative explanation, saying they didn’t expect their loved ones to spend as much on them this year because of the pandemic. Meanwhile, 23% admitted that they felt less pressure to spend on gifts since their celebrations would be virtual this year.
In terms of what respondents anticipate spending, the vast majority (73%) say the total will come in below $500. Notably, that’s less than half of the $1,007 per shopper average that the National Retail Federation expected for 2019. Moreover, only 6% say they’ll spend between $1,000 and $1,500 this year while a mere 2% intend to spend more that $1,500.
Of course, while those surveyed are planning to spend less, it’s worth mentioning that holiday budgets are often busted by shoppers. More often than not, this is the result of social pressure and a desire to please friends and family. As Debt.com chairman Howard Dvorkin explains, “I’ve spent nearly three decades counseling Americans on how to save more and spend less, but that’s nearly impossible to do during the holidays. No matter how blunt they are about their debts, they’ll blow their holiday budget.” Dvorkin continued, “Why? Because Americans fear only one thing more than going broke. They fear their friends and family will think they’re cheapskates. Everyone wants to be Santa Claus, and no one wants to be the Grinch.”
Another factor that could potentially change the equation would be another round of economic stimulus checks. Although it’s unclear if additional checks — such as the $1,200 payments sent to Americans earlier this year — could be approved and mailed before the holidays, it’s hard to imagine that such an injection of funds wouldn’t have some impact on total spending. Then again, if would-be shoppers have already come to an agreement with their loved ones about a toned-down celebration this year, a decision may still be made to reduce spending and use any potential stimulus for more pressing financial needs.
All in all, it’s really no surprise that Americans are planning to cut back this holiday season. While this may be a shame for small businesses and other retailers who could use a boost after a tough year, it likely makes sense given the economic turmoil that still exists. In any case, although the 2020 holiday season is shaping up to be unlike any other, hopefully those across the country will be able to safely celebrate in their own ways.
