The season of spending is upon us, and with it the pressure to stretch the holiday budget to the brink … and uncomfortably beyond, according to a new Bankrate holiday spending survey.
Are you feeling the financial pinch yet? Consider this radical cost-cutting measure: Skip the gifts?
That’s right. Many say they will opt out of holiday traditions that are out of their price range. RSVP: “Sorry, no presents this year. My money’s got other plans!”
Unthinkable? According to Bankrate, 16% of people surveyed (which translates to 38 million Americans) would be willing to boycott holiday gift-giving to rein in seasonal spending.
Sources of holiday spending stress
The holidays present a panoply of opportunities to overspend. It’s not just the weak-willed among us, either: Two-thirds of respondents told Bankrate.com they’ve felt obligated to spend beyond their means during this time of year.
Show of hands: Who here felt like their holiday budget was blown even before spending a dime? One look at the price of airfare to my hometown in Kansas had me downsizing my Thanksgiving plans and thinking cotton scarves instead of cashmere for gifts. (Sorry, fam!)
According to Bankrate, 16% of people surveyed (which translates to 38 million Americans) would be willing to boycott holiday gift-giving to rein in seasonal spending.
The holidays come with a pretty hefty price tag already: The average planned outlay is $1,047.83, according to the National Retail Federation. The tab for making merry is highest for shoppers between the ages of 35 and 44 who expect to spend $1,158.63.
As a financial writer I’m obligated to point out what else that money could be doing for you. (Seriously, my editors expect it.): If instead of stuffing everyone’s stockings with cashmere you invested that $1,047.83 in the stock market and earned a 6% annual average rate of return, in 10 years you’d have an extra $800. Let it sit for 25 years and we’re talking nearly $4,500.
The financial pressure’s most acute among parents of children under the age of 18, 71% of whom confessed to Bankrate that they’ve shelled out more money than they’re comfortable with on presents. But they’re not alone when it comes to holiday spending stress:
- More than one-third (36%) of holiday party hosts told Bankrate they spent more than they set aside to entertain guests.
- One-third (33%) of seasonal travelers have been driven to break their budget on airfare, gas and lodging. That, and the hassle of winter travel, is probably why nearly half (45%) would be willing not to travel at all.
- Even the most charitable among us have been financially squeezed: 36% of those who donate to charity report feeling pressured to give more than they intended.
What we’re willing to do to cut holiday spending
Skipping all the merrymaking for the next two months may not fly if you have friends and family looking forward your presence (and, let’s be honest, at least a few token presents). But you don’t have to buy in to the pressure to overspend.
The key to sticking to your holiday budget is to set expectations with your loved ones, says Bankrate.com data analyst, Adrian Garcia. “Get creative and find alternative ways to give this holiday season.” Heck, you don’t even have to get that creative. For example …
- Two in five (41%) gift-givers are willing to curb spending by committing such gift-giving “taboos” such as regifting (24%) and buying used or secondhand items (19%).
- More than half (53%) would limit gift exchanges to immediate family members.
- Another popular approach embraced by 53%: Seeking out coupons and store sales.
- Thirty-six percent of crafty respondents said homemade gifts were a good option. (Here’s a hack for making your own holiday cards.)
- To save money on travel, 38% would couch surf with family instead of spending money on a hotel.
Manage the high costs of the holidays
Looking for a few more ways to manage the high costs of the holidays?
- Create an effective holiday budget — start early, be cutthroat.
- Incorporate these six painless ways to save money on gifts.
- Clear your head and master your holiday spending with these mind-over-money tips from behavioral economist Dan Ariely.
JOIN US: How are you handling the pressures of holiday spending? Join us in the private HerMoney Facebook group and share your money saving tips — and pick up a few new ones!