Here’s one thing that nobody wants for Christmas: debt. With one week left until Christmas, many last-minute shoppers are scrambling to get items checked off their Christmas lists. Whatever that special gift may be, it will be more expensive this year than last thanks to inflation.
“At the end of the day, their money just doesn’t go as far," said Chris Abts, President and founder, Cornerstone Retirement in Reno. "If it’s more expensive at the grocery store, more expensive at the gas pump, there’s just less at the end to spend on fun things."
Fun things—like presents. Reports show that on average, people living in the United States will spend roughly $1,000 this holiday season. However, with inflation at its highest levels since the 1980’s with consumers' money is not what it used to be. That means people are basically spending the same amount this Christmas than last, but getting less.
“We have not seen a large increase in over last year,” he said. “I tend to think that has something to do with inflation. Things are approximately, depending on what you’re buying, 7-10% more expensive than last year.”
Analysts are also noticing a shift in what people are spending money on this year.
“As we get farther away from this COVID pandemic, I think we are going to find people are spending less this year on stuff, material goods, and probably more of that budget on things that have more of a socializing standpoint," said Abts. "Maybe a party or gifts in that regard as people are able to freely get out and see each other more often."
But whatever you buy, creating a holiday budget is critical, especially this year. Abts warns people that there is a right way and a wrong way of holiday spending.
“Spend what you can afford,” said Abts. “Hopefully don’t put it on a credit card and know that you have a big bill come January.”
A big credit card bill is never a good way to ring in the new year.
“That creates some anxiety,” he said.
Nobody wants anxiety during the holidays… right?
