How Do Americans Plan To Spend This Holiday?

Research of the Week: Consolidated Credit’s 2017 Holiday Spending Survey

Is America facing a “gift gap” to complement our wage gap?

Each week, Consolidated Credit searches for financial research that can help you deal with your debt and budget. This week…

The interesting study

This week’s study focuses on Consolidated Credit’s own holiday spending survey. Each year, we ask people who are working to pay off debt how they plan to spend for the holidays. As the most expensive shopping season of the year, the winter holiday shopping season places an immense burden on low and middle-class households. This year, that burden seems to be taking an even bigger toll.

Consolidated Credit polled 1,263 adults that have contacted our organization for credit card debt help. These are the results…

The big result

If you look at national surveys of the general population, Americans will spend more this year on the holidays. According to the National Retail Federation,  the average household will spend $967 this year; that’s up from $935 last year.

However, Consolidated Credit’s survey respondents overwhelmingly say that they will spend less instead of more.

Do you plan to spend more or less than last year?
More 17.18%
Less 82.82%

Chart showing that 80% of respondents plan to spend less this year

In addition, over three quarters of respondents (78%) say that they plan to spend less than $500 this year.

What’s your holiday budget?
$0-$10 4.48%
$20-$100 14.56%
$101-$200 15.36%
$201-$300 17.68%
$301-$400 12.64%
$401-$500 13.68%
$501-$600 8.80%
$601-$700 3.12%
$701-$800 3.60%
Over $800 6.08%

Chart showing that most respondents will spend less than $500

Most – if not all – of that budget will be used on gift giving in most households:

How much of your budget will be used for gift giving?
0-20% 15.23%
21-30% 7.57%
31-40% 4.92%
41-50% 6.53%
51-60% 6.20%
61-70% 7.33%
71-80% 11.85%
81-100% 40.37%

Chart showing percentage of budget for gift giving

More fascinating details

We also asked those who said they would spend less to tell us why. Most of the answers point to a lack of financial stability, from economic uncertainty to decreased income to less savings.

Why do you plan to spend less this year?
The economy is worse 16.17%
I didn’t save as much this year 24.74%
I have less income (job loss/pay cuts) 25.02%
I’m doing a gift swap with a few people 8.57%
I plan on giving mostly handmade gifts 7.12%
Other 18.38%

Chart showing why people plan to spend less

“Other” includes reasons from buying a home to wanting to save more money this year. Interestingly enough, those who said they would spend more didn’t cite more prosperity as the reason. In fact, one in four said their family had grown so there were more people to buy for this year. Others say they feel pressure to make their loved ones happy, and that they simply love spreading joy and good cheer.

Why do you plan to spend more this year?
The economy is better 7.44%
My family grew 27.44%
I got a promotion/raise 5.58%
I expect a big bonus 3.72%
I get joy from giving to others 22.33%
I want to make friends and family happy 16.28%
I saved more this year 17.21%

Chart showing why people plan to spend more

That makes sense, given that gift giving represents the largest part of people’s budgets tend to go towards gifts. This year, almost half (48%) of our respondents said they would buy gifts for about 1-5 people. However, one in three (34%) said they needed to buy for 6-10 people.

How many people are you shopping for?
1-5 48.02%
6-10 34.87%
11-15 11.70%
More than 15 5.41%

Chart showing number of gifts to buy

The good news is that people may be getting smarter with the extras. Most respondents are skipping pet gifts this year and those who won’t at least plan to be frugal.

Do you plan to buy gifts for your pets?
Yes 32.50%
No 67.50%

Chart showing how many people will buy for their pets

How much do you plan to spend on your pets?
$0-$25 68.66%
$26-$50 22.89%
$51-$75 5.47%
$76-$100 1.00%
Over $100 1.99%

Chart showing how much people spend on pet gifts

It’s also encouraging to see that only one in four Americans plan on self-gifting this year

Will you buy a gift for yourself this year?
Yes, I never mean to but there’s always something on sale that I want 26.07%
No, this is a time to give to others, not yourself 73.93%

Chart showing how many people self-gift

In addition, although most indebted households still plan to donate money to charity this year, more than 90% plan to donate less than $100. When we asked the families in the same situation last year, only 35% planned to donate less than $100.

Do you plan to donate money during the holidays?
Yes 59.12%
No 40.88%

 

Chart showing how many people will donate money this holiday season

How much do you plan to give to charity?
$0-$20 31.17%
$21-$30 19.92%
$31-$40 5.83%
$41-$50 17.89%
$51-$60 4.88%
$61-$70 1.08%
$71-$80 1.22%
$81-$100 10.03%
Over $100 7.99%

Chart showing dollars spent on charity donations this year

As far as other holiday expenses go, nearly two thirds (66%) of respondents will spend less than 20% of their holiday budget on entertaining.

How much of your budget will be used for entertaining?
0-20% 66.45%
21-30% 19.92%
31-40% 6.94%
41-50% 3.72%
51-60% 1.49%
61-70% 0.58%
71-80% 0.25%
81-100% 0.66%

Chart showing percentage of budget spent on entertaining

Most people we asked are not travelling for the holidays; the majority who are say they plan to drive to save money. As a result, most will also spend less than 20% of their holiday budget on travel.

Will you travel this season?
Yes 17.29%
No 82.71%

Chart showing how many people plan to travel this season

How do you plan to travel?
Fly 20.38%
Drive 75.83%
Cruise 0.95%
Public Transportation 2.84%

Chart show how people will travel this season

How much of your budget will be used on travel?
0-20% 70.19%
21-40% 21.63%
41-60% 6.25%
61-80% 0%
Over 80% 1.92%

Chart showing percentage of budget used on travel

People also have learned to shop smarter, which usually involves shopping earlier. In fact, over one third of respondents say they shop year-round now, as items go on sale.

When do you shop? (check all that apply)
Year-round as items go on sale 34.90%
Right after the holidays end (for next year) 8.31%
Black Friday 30.86%
Cyber Monday 18.77%
Throughout November 37.78%
I’m a procrastinator, so just before the holidays 21.23%
Other 6.83%

Chart showing when people do most of their holiday spending

That allows many shoppers to avoid using credit to cover holiday expenses; they can use savings or cash instead. However, 42% still say they use credit cards to cover at least some holiday expenses.

How do you cover costs? (check all that apply)
I save all year 35.35%
I use my year-end bonus 20.38%
Credit 41.98%
Gift cards / rewards 38.79%

Chart showing how people pay for holiday expenses

That’s in line with the number of people who told us they incurred holiday debt last year. Only about 45% said they did. Out of that number, over two thirds (70%) said they’re still paying off last year’s debt.

Did you incur debt last holiday season?
Yes 45.97%
No 54.03%

Chart showing how many people incurred holiday debt last year

Are you still paying last year’s debt off?
Yes 69.73%
No 30.27%

Chart showing how many people are still paying down last year's holiday debt

What you can do

“Households need to budget carefully for the holiday shopping season,” says April Lewis-Parks, Consolidated Credit’s Financial Education Director. “It’s encouraging that families that have reached out to us for counseling plan to spend less than average Americans. But they need to plan carefully and stick to that budget if they want to keep that goal.”

The concern is that while families may plan to spend less than $500, that things like impulse purchasing and last-minute gift giving could jack that price tag up.

“If you plan to spend $500 and then end up spending $900, it’s very likely that the added costs will end up on credit,” Lewis-Parks explains. “In order for your holiday budget to be effective in keeping you out of debt, it must be accurate.”

Consolidated Credit offers these resources to help you stay on-budget: