Aimee White is worried about inflation and is fearful of a recession, but she’s not letting this impact her holiday spending.
“We’ve been through so much over the past couple of years so even though the economic situation is difficult, and we’re not exactly flush with cash, we need to let our hair down and enjoy ourselves," she said. “This year, it’s full steam ahead for a holiday extravaganza."
“We’re seeing greater participation among lower-income households (those who earn less than $50,000 per year),” Sides said. “They’ve settled into the ‘new normal,’” and are feeling more stable — and hopeful — given wage growth, said Sides. “They’re going to jump in and spend.”
Sides said this group of shoppers plan to spend an average of $671 this holiday season. That’s 25% more than last year.
On the flip side, high-income earners (those who make more than $100,000 per year) plan to cut back by 7%, bringing their spending down to an average of $2,438.
Add it all up and spending, overall, will match 2021 levels at $1,455, said Sides. “But with inflation running in the 8% range, we’re spending differently.”
For starters, many consumers across all income groups are trimming their lists.
Mike Murphy not only slashed his list from 15 recipients to four (immediate family members only), but changed his gift-giving focus.
Murphy, who lives in Washington, D.C., said he’s going to buy his brother a portable heater, make a photo album for his girlfriend, and turn a family portrait into a puzzle for his parents. “I look at the holiday season in a different light these days.”
So does Jared Weitz.
Weitz said he’s loading up on gift cards and gift certificates this holiday season — for family, friends, and business associates. He’s not alone.
“Consumers are cutting back across every category — apparel, electronics, toys and even things like home goods and durables, which exploded during the pandemic — but we’re seeing big growth in gift cards (up 7%) as consumers look for ways to control their budgets,” Sides said.
Also driving gains this holiday season: experiences (up 7%), Sides said, as pandemic concerns fade and Americans return to theaters, arenas, stadiums, and festivals.
Nicole Booz is one such consumer.
“The memories my husband Jon and I make taking our boys to something they love will last longer for both them — and for us — than anything physical we can buy,” she said.
Personal finance journalist Vera Gibbons is a former staff writer for SmartMoney magazine and a former correspondent for Kiplinger's Personal Finance. Vera, who spent over a decade as an on-air financial analyst for MSNBC, currently serves as co-host of the weekly nonpolitical news podcast she founded, NoPo. She lives in Palm Beach, Florida.
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