Only 14% of US consumers say they set aside savings for holiday shopping.
SAN MATEO, Calif., November 14, 2022 /PRNewswire/ — Americans plan to take a restrained approach to gifts, travel and other spending this holiday season, a sentiment boosted by economic concerns over inflation, rising interest rates interest, layoffs and the threat of a looming recession, according to a new report by Reachthe leader in digital personal finance.
The 2022 Season Expenditure Reportpublished by the Achieve Center for Consumer Insights, found that 69% of American adults plan to cap their gift spending at $500 this year, while 14% said they had no intention of buying gifts. The report also found that only 14% of Americans say they have separate savings for vacation-related expenses, while one in five consumers wish they had created a dedicated vacation savings plan.
“While most Americans are planning limited travel this year, many still wish they had done a better job preparing financially for the holiday season,” said the co-founder and co-CEO of Achieve. Brad Stroh. “The large gap between consumers making holiday savings plans is particularly concerning, given that household debt is at peak levels and growing.”
The data and conclusions of the 2022 Season Expenditure Report are based on an online survey of 1,000 U.S. consumers ages 18-65, including a statistically significant sample of Gen Z adults. Data is representative of Census Bureau benchmarks of the U.S. population for the age, sex, race and ethnicity.
Stay home for the holidays
Nearly half of respondents plan to celebrate the holidays at home this year, while 28% say they have no plans at all. Of those who will travel, most plan to stay in the United States, usually to visit family. Respondents whose annual household income is greater than $100,000 are nearly three times more likely to take national holidays this holiday season than those with incomes below $100,000. The report also found that feelings about gifts vary by age, gender and relationship status.
- Women were about twice as likely as men to say they put a lot of effort into choosing gifts.
- Men were almost three times more likely than women to say they like giving away tech gadgets.
- Baby boomers were the most likely to say they dislike giving gifts, while millennials and Gen Z were the most likely to say they were generous and caring.
- Married respondents were more likely to consider themselves last-minute shoppers than single, engaged/living with a partner, or divorced/widowed consumers.
“Finances are a significant contributor to holiday stress,” Stroh said. “But consumers who stick to their budget and focus on their priorities this season will get through the holidays with less stress and potentially more money in their bank accounts.”
Holiday Payment Trends
Consumers plan to use a combination of methods to pay for holiday spending on gifts, new outfits, food and entertainment. Most will rely on available funds accessed from their bank accounts, supplemented by credit card spending. Although the overall use of paper checks is minimal, a surprising 9% of Millennials expect to use them, compared to only 4% in each of Gen Xers and Baby Boomers. Other payment methods, such as payday loans and money orders, play a much smaller role in most consumers’ holiday shopping.
- While freebies can be moderate, 20% of respondents said they expect their credit card debt to increase by $1,000 or more during the holidays.
- Gen X (5%) and Gen Y (6%) expect they will need the most help managing their vacation debt. Separately, 65% of baby boomers — the highest proportion of any generation — believe they will keep their spending under control.
- Among those who expect to accumulate more than $5,000 In the case of holiday credit card debt, 17% think they will need outside help to settle their debt. Conversely, only 2% of consumers who plan to add less $500 credit card balance believe they will need the same kind of help.
Tips from Achieve: 5 Steps to Building a Holiday Budget
Many people resist making a budget because they think it only serves to limit spending. Instead, think of your budget as a tool that helps direct spending to the things that are most important to you. Any good budget is based on setting priorities and setting realistic goals.
- Figure out how much you can spend this year without incurring unnecessary debt.
- Carefully consider and list everything and everyone you plan to spend money on during the holiday season. Include gifts, greeting cards, decorations, holiday meals and year-end gratuities for service providers. Finally, don’t forget about future travel expenses, even if you’re only traveling across town to visit loved ones.
- Then start listing gift ideas and include prices. You may need to modify the gifts you want to buy to avoid going over your budget constraints.
- If the budget seems tight, but you don’t want to take someone off your gift list, the gift of time can mean so much more than a wrapped gift.
- Remember what your vision of vacations is and that vacations were never meant to create financial stress.
About the Achieve Consumer Information Center
The Achieve Center for Consumer Insights is an ongoing initiative that leverages Achieve’s team of digital personal finance experts to provide a view into the state of consumer finances. In addition to sharing insights drawn from Achieve’s proprietary data and analysis, Achieve’s Consumer Insights Hub publishes in-depth research, tailored data and thoughtful commentary in support of Achieve’s mission. Achieve to help everyday people borrow and stay on the path to a better financial future.
Reach is the leader in digital personal finance. Our solutions help everyday people engage and stay on the path to a better financial future, through innovative technology and personalized coaching. Leveraging proprietary data and analytics, our solutions are tailored to every stage of a consumer’s financial journey and include personal loans, home loans, debt relief, and financial tools and education. . Based at San Mateo, CaliforniaAchieve has more than 2,700 dedicated employees across the country with centers in California, Arizona and Texas and has consistently been recognized as a better place to work.
Achieve and its affiliates are subsidiaries of Freedom Financial Network Funding, LLC, including Bills.com, LLC d/b/a Achieve.com (NMLS ID #138464) Equal Housing Lender; Freedom Financial Asset Management, LLC (NMLS ID #227977); Freedom Resolution (NMLS ID #1248929); and Lendage, LLC d/b/a Achieve Loans (NMLS ID #1810501), Equal Housing Lender.