All in all, Americans are planning to cut back on holiday spending this year. About 50% of Americans say they’ll be spending the same amount they did last year, while 22% say they plan to spend less. Of that 22 %, about 34% say that other expenses are taking priority over buying gifts and other holiday-related purchases. Ten percent of Americans say they don’t plan on spending anything at all this holiday season.
People Aren’t Saving for Christmas
The COUNTRY Financial Security Index® took a survey weeks before Christmas to see how most Americans are feeling about their finances at this time of year. What they found is most people don’t feel all that financially secure heading into the holiday season. In fact, the survey found that only 23% of people are saving throughout the year for holiday spending. That’s right – less than a quarter are financially prepared for the holidays.
Doyle Williams, Executive Vice President of COUNTRY Financial said, “We shouldn’t let the magic of the season get us carried away into overspending and making financial decisions we will regret come January. Take simple steps to create a realistic holiday budget that accounts for all of those holiday expenses such as gifts, travel, decorations and entertaining. Then, start fresh in the new year with a savings plan to alleviate some of the financial burden in 2019.”
What is interesting is that millennials are the most likely to plan ahead to be able to afford additional holiday expenses. A surprising 31% of people ages 18-34 save throughout the year for Christmas. Twenty-five percent of millennials planned to work more hours to lessen the financial burden of the holiday season. Another 9% got an extra job to cover holiday spending, 14% sell personal items, and about 8% accept money from family/friends to help.
Other Holiday Spending Stats
About 70% of Americans say their largest holiday expenditure will be on gifts. Other major costs like entertaining and travel expenses will only account for 9% and 8% of spending, respectively.
Of the Americans headed out shopping this season, 70% have a specific budget in place. However, 20% say they don’t have a budget amount in mind. About 39% plan to spend less than $250 or no more than $500, while 17% of Americans plan to spend more than $1,000 during the holiday season.
Budgeting and spending statistics vary by income level and age. The older you are, the more likely you are to spend more around the holidays. Folks ages 65+ plan to spend around $1,129 each. Younger Americans, between the ages of 18 and 34, plan to spend much less ($585). People with an income sitting around $75,000 and above also plan to spend around $1,082 while individuals with an income falling between $50,000 and $74,000 plan to spend $757 or less.
Unsurprisingly, people with kids are more likely to spend more as well. Thirty-four percent of Americans are planning to spend most of their holiday budget on their kids. Women are most likely to say they will spend most of their holiday budget on their kids, while men are more likely to say they are spending the bulk of their Christmas cash on their significant other.
Family members will account for another 19% of spending, significant others (16%), grandkids (13%), friends (3%), and pets (1%). Although many people are in the “treat yourself” mentality during the holiday season, only 7% of Americans will spend the most on themselves.
It is always a good idea to have a holiday budget in mind to keep your finances on track throughout the season. It is important to remember that it isn’t important how big or expensive the gift you give is. What is most important is the thought you put into it.
Consider saving money throughout the year for large holidays and other major expenses. You should also set up a budget and write a list for each present you intend to buy. Don’t go into debt or break the bank celebrating Christmas!