The holidays are a time to spread a little extra joy and spend a little extra money. Case in point: Last year, the average shopper dropped over $900 on holiday gifts, with the typical parent spending more than $400 per child. Yikes.
But while retailers may have had reason to celebrate last holiday season, some might be in for major disappointment this time around. That's because Americans are planning to spend less money on gifts in 2017, according to a newly released CreditCards.com report.
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Specifically, only 53% of consumers are planning to buy a gift that costs at least $50 this year. And only 27% expect to plunk down $100 or more on a single item. Furthermore, 12% of adults aren't planning to buy any gifts at all.
Of course, this news could spell trouble for retailers, many of whom bank on the holidays for revenue generation. On the other hand, it's actually a positive thing to see so many cash-strapped Americans finally taking a more sensible approach to holiday spending.
How much can you really afford to spend on gifts?
It's not a secret that numerous Americans live paycheck to paycheck, and have been doing so for years. An estimated 57% of adults, in fact, have less than $1,000 in savings, while 39% have no savings at all. And these are precisely the same people who can't afford to be shelling out big bucks during the holidays.
But it's not just low earners who plan to curb their spending this season. A good 44% of households with annual incomes of $80,000 or more also plan to keep their most expensive holiday gifts to $100 or less.
Why the change in attitude? For some, it might be a matter of coming to terms with their limited budgets or acknowledging the need to focus on building savings rather than continue to live so precariously. For others, however, it's no doubt a matter of not wanting to increase their debt.
Credit card debt recently reached an all-time high in the country, with consumers owing a collective $1.0217 trillion. The average household, meanwhile, carries something in the ballpark of $16,000 in credit card debt, so it makes sense not to add to an already sizable figure.
On the other hand, just because consumers aren't intending to overspend this year doesn't mean they'll stick to that plan. While 65% of Americans actually set a holiday budget, of those who do, 77% expect to exceed it. In other words, the bulk of shoppers still risk falling victim to temptation. And if they do, their finances are only going to suffer.
Stick to your game plan
If you're approaching the upcoming holiday season with the intent to keep your spending to a minimum, there are steps you can take to ensure that you don't wind up busting your budget and going into further debt. For one thing, consider shopping with cash alone if you don't trust yourself with a credit card (or even a debit card). If you make a list of the items you need and bring only enough cash to cover them, you'll take away the option to overspend.
Another idea? Get a side job to bring in some extra cash this holiday season. Numerous retailers need extra hands on deck this time of year, and if you work a few nights a week, you'll have more spending money to throw around if you do succumb to temptation.
No matter what you do, don't make the mistake of exceeding the budget you set and adding to your debt pile. Even a small amount of debt can create a situation where you're paying it off for months on end. You're better off keeping your spending to a minimum and coming up with other ways to show your loved ones you're thinking of them -- because at the end of the day, fancy gifts are indeed nice, but it's still the thought that counts.
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