One-Third of Americans Are Skipping Christmas Thanks to Inflation

One-Third of Americans Are Skipping Christmas Thanks to Inflation

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Inflation seems to have found its way into Santa’s workshop — and the elves aren’t happy. A recent survey found that more than one in three Americans are skipping gift-giving this year thanks to inflation, while 50% say Santa will be less generous than in previous years.

Even though it appears that consumers are handling a slowing economy, some cracks are forming. Credit card debt is rising. Almost half of Americans say they won’t pay off their holiday purchases by the due date. Additionally, over half of people surveyed report feelings of anxiety.

Luckily, there are steps one can take to limit the damage to their finances and the stress they experience during this time of year.

A Snapshot of Christmas 2023

According to a Wallethub study, Christmas 2023 will see a thriftier Santa. Over one in three Americans say they will not give gifts due to inflation, and 28% say they plan to spend less on holiday shopping. Almost half say that inflation has affected their charitable giving.

Forty-eight percent of Americans said they planned to start their holiday shopping earlier in hopes of smaller monthly bills as opposed to one large one. It could also help them take advantage of earlier sales many retailers offer to get consumers in the door.

Dana M. Peterson, Chief Economist at The Conference Board, says, “October’s Consumer Confidence Index suggests Americans are entering the holiday season in a somewhat cautious mood, with the overall, present situation, and expectations indexes all seeing dips.” She continues, “The softening in confidence may have affected overall holiday spending plans. Planned spending on non-gift items fell materially this year.”

Christmas Present vs Christmas Past

Christmas spending has fluctuated in recent years. The overall amount people planned to spend on holiday gifts plummeted during the pandemic, from $942 in 2019 to $805 in 2020. Last year, people spent an average of $932.

The $923 estimated spending this year is a slight decrease from last year. But with conflicting consumer data, retailers are stuck. Still reeling from excess inventory after the pandemic and its negative impact on their bottom lines, they’re nervous about stocking up because of softer consumer demand. As the season progresses, this could lead to many out-of-stock items or even fewer discounts if demand is higher than forecasts.

Debt in the Name of Christmas Cheer

Instead of cash stuffing throughout the year in preparation for the upcoming holiday season, many people rely on credit for Christmas shopping. While budgeting is not a magic bullet, it can help an individual maintain perspective and plan more efficiently for increased spending at the end of the year.

Sadly, credit card debt is almost synonymous with the holidays. People start racking up debt around October and continue through mid-to-late December. Then, they spend at least a portion of the following year paying off that debt.

This year, though, consumer credit behavior is a little more telling, hinting at a financial struggle amid growing inflation in a sinking economy. Almost one out of five Americans plan to apply for a new credit card to help with their holiday expenses. Nearly one in four Americans say they are still paying off last holiday season’s credit card debt, and roughly half say they won’t pay off their purchases in full by the due date.

Stress and the Holidays: It’s Nothing New

Stress is also synonymous with the holiday season, and spas offer special packages ingeniously targeted at those who may feel the pressure of the holidays.

Physician referral site Sesame polled 500 respondents about their mental health and stress levels as they approach the holidays. Two-thirds said they were experiencing moderate to extreme holiday stress levels, including increases in:

  • Anxiety (52%)
  • Depression (41%)
  • Financial stress (66%)

Some of the most stressful parts of the holiday shopping season include:

  • Coming up with gift ideas (35%)
  • Holiday weight gain (33%)
  • Crowds (28%)
  • Finding the best deals (20%)
  • Cost of gifts (17%)

Only about 34% of Americans polled said that they would consider seeking counseling to help them deal with the stress. About 14% said that they are interested in seeking professional help from a mental health counselor but feel that they are not able to afford it now.

Christmas Survival Tips for Less Financial Stress

The good news is there are solutions to lessen or avoid much of the stress surrounding the holidays. The simplest for most is to plan ahead by knowing how much money can go towards gifts. Then, keep a list of receipts to avoid overspending.

Some people should pick up a side hustle if money is tight, like becoming a rideshare driver or helping others wrap gifts. There are many ways to double your money so that the cost of gifts is not as stressful.

Many people (35%) feel stressed about coming up with gift ideas. To limit this stress, contact the person and ask what they need. Alternatively, ask their friends or family for ideas.

Finally, it’s critical to take some personal time to limit stress and enjoy the true meaning of the holiday season. By being proactive and intentional this year, it’s possible to make this season the most enjoyable one yet.

This article was produced by Media Decision and syndicated by Wealth of Geeks.

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