Ho, Ho, Ho When Budgets are Low

Indebted families scale back to avoid taking on more holiday debt.

The holidays are hard on any budget, but that financial stress is compounded when the household is already facing challenges with debt. With that in mind, Consolidated Credit surveyed over 2,500 people who have reached out to them for help to see how they’re doing at budgeting and spending this holiday season.

The results show that the majority of these families who have already stared down the hard road toward freedom from debt are scaling back this year in order to avoid adding to their financial stress. As a result, 89 percent plan to spend less this holiday season, doing everything from scale back on entertainment budgets to limiting the number of people to gift.

According to additional survey results, two in five indebted families (40 percent) will spend the 80 percent or more of their total holiday budget on gifts, with only the remaining 20 percent to cover things like entertainment and travel. These families who’ve already learned how burdensome credit card debt can be have found smart ways to avoid end-of-year debt. In fact, 23 percent have shopped throughout the year to avoid holiday debt here in December.

Avoid bad holiday money habits

The survey results did reveal a few financial behaviors that should land some indebted families on Santa’s financially naughty list.

• 28% of respondents will self-gift this year
• 26% will rely at least partially on credit cards to pay for holiday purchases
• 34% wait until just before the holidays to shop

“If you’re still spending money putting the final touches on your holiday plans, take a minute to really consider whether each last touch you make is really worth the debt you’re likely to be taking on at this point in the shopping season,” says April Lewis-Parks, Director of Community and Public Relations. “Put the cards away, stop spending and use the time you free up by not shopping to really enjoy the holiday season with your family.”

Complete survey results

Do you plan to spend more or less this year?
More	11.05%
Less	88.95%

If you plan to spend MORE, why?
The economy is better	6.98%
My family grew	25.97%
I have more income	10.08%
Big year-end bonus	3.88%
To make my family happy	10.85%
I’ve been saving more	17.05%

If you plan to spend LESS, why?
The economy	15.73%
I didn’t save as much this year	23.71%
I have less income	23.47%
I’m doing a gift swap this year	8.08%
I plan on making gifts this year	6.57%

What’s your total holiday budget?
$0 – I don’t do the holidays	6.81%
$20-$100	15.81%
$101-$200	16.15%
$201-$300	15.64%
$301-$400	11.77%
$401-$500	12.36%
$501-$600	6.48%
$601-$700	3.41%
$701-$800	4.50%
More than $800	7.06%

What percentage will be used for gift giving?
0-20%	18.51%
21-30%	7.40%
31-40%	3.89%
41-50%	6.85%
51-60%	5.54%
61-70%	5.71%
71-80%	11.24%
81-100%	40.87%

How many people are you shopping for?
1-5	48.77%
6-10	33.50%
11-15	11.42%
More than 15	6.30%

Did you incur debt last holiday season?
Yes	51.99%
No	48.01%

If so, are you still paying off last year’s debt?
Yes	70.73%
No	29.27%

How do you plan to pay for the holidays?
Cash/prepaid – I save throughout the year	49.68%
Cash/prepaid – I use my year-end bonus	27.39%
Credit	25.80%
Gift cards / rewards	18.01%

When do you do the bulk of your shopping?
Year-round as items go on sale	23.96%
Right after the holidays the year prior	6.45%
Black Friday	17.89%
Cyber Monday	13.16%
Throughout November	26.62%
Right before the holidays in December	34.41%

Will you buy any gifts for yourself?
Yes	27.92%
No	72.08%

How much of your budget will be used for entertaining?
0-20%	75.62%
21-30%	15.75%
31-40%	3.45%
41-50%	2.55%
51-60%	1.29%
61-70%	0.47%
71-80%	0.52%
81-100%	0.35%

Will you travel this holiday season?
Yes	16.66%
No	83.34%

If you’re traveling, are you…
Flying	18.28%
Driving	77.55%
Cruising	1.57%
Taking public transit	2.61%

How much of your budget will be used on travel?
0-20%	76.82%
21-40%	14.58%
41-60%	5.21%
61-80%	2.08%
81-100%	1.30%