How much does the average American plan on spending this holiday season? Take a quick guess.
As you ponder this, take into account that, between November’s Consumer Confidence Index being at a nine-year high and total online spending estimated to rise by 18 percent this year, shoppers have plans to shop this holiday season.
According to American Research Group, that number is $929.
However, if you ask families with children, it’s much higher. T. Rowe Price data reported that those moms and dads are slated to spend more than $420 per child, with more than a third of those parents shelling out more than $500 for each child.
With the pressure to come up with the perfect present for each recipient, many Americans said they’re going to rack up debt. This holiday season, 56 percent of Americans have already confessed that they know they’re going to rack up debt, with 16 percent already knowing it may take until at least June 2017 to pay it off.
What may sound scarier is the idea that Santa’s visit may have parents putting their finances at risk just to keep the kids happy. About a quarter of families are pulling money from their 401(k), plunging into savings slated specifically for “emergencies only” and even taking out payday loans — just for the holiday happiness.
Even if a budget was decided on prior to the holiday season, nearly 60 percent said they likely won’t end up sticking to it.
Experts are weighing in on how families should plan and recoup after the holiday. From paying off the cards no matter what to ward off interest charges, to avoiding the emergency fund, to staying clear of the retirement savings, experts encourage smart spending.
Interestingly enough, the advice that experts give on “smart spending” is to withdraw a set amount of cash and stay within that amount.
Regardless of those warnings, venturing against using credit for these families searching to make those holiday smiles bigger may be easier said than done.
Especially since the urge to spend online is more prevalent, and possibly easier, than ever.