Average Holiday Season Spending Expected to Top $1,000 This Year
Thanksgiving and Black Friday may still be a couple of weeks away but, make no mistake, the holiday season has arrived. As the shopping bonanza gets underway, new studies are attempting to estimate how much the average American adult will end up spending on gifts, decorations, and other festivities this year. According to the National Retail Federation, that number is expected to top $1,000 in 2018.
The NRF estimates that the average consumer will spend a total of $1,007.24 during the holiday season. This marks a 4.1% increase from last year when the average totaled $967.13. As one might expect, the bulk of this spending ($637.67) is expected to be earmarked for gifts with decorations, cards, and other non-gifts accounting for $215.04. Meanwhile the other $154.53 is to be claimed by consumers taking advantage of holiday deals and specials for themselves.
Sadly, where there’s spending, there’s also debt. To that point, a new survey by WalletHub found that 22% of Americans expect to still have holiday-related credit card debt come February. On a brighter note, 60% say they expect to pay their credit card balances in full when they come due. The remaining 18% say they’ll likely pay off their credit card debt by January 1st.
Speaking of credit cards, WalletHub also found that one in six respondents planned on applying for a new a new credit card for their holiday shopping. Surely not by coincidence, the site estimates that the average initial purchase discount offered from store-branded credit cards this year will come in at 29%. WalletHub also notes that some credit cards will offer sign-up bonuses topping $500 this holiday season while others will advertise 0% introductory APRs for 15 months.
For the record, WalletHub also asked consumer’s how much they intended to spend this holiday season. However their figures tended to come in a bit lower than the NRFs — possibly because it’s unclear if non-gift spending was included. Nevertheless a full one-third of respondents report a spending budget between $251 and $500 this year while 20% plan on spending $501 to $1,000 and 15% say they’ll spend over $1,001. Impressively, 19% expect to spend less than $100 on gifts this year and 13% will spend between $101 and $250.
Just for fun, WalletHub also asked what types of items topped consumers’ holiday lists this year. In first place, 31% said “electronics” to narrowly beat out “gift cards” at 30%. Rounding out the list were clothes (19%), books and ebooks (9%), furniture and appliances (8%), jewelry (5%), and toys (3%).
Between reports from the National Retail Federation and WalletHub, there seems to be some good and bad news this holiday season. With spending expected to top $1,000, retailers are likely in for a happy holiday. This increase in spending can probably be at least partially attributed to the current economy and the fact that 60% of respondents told WalletHub they’re better off this year than last. At the same time, with one in five Americans anticipated taking on holiday debt that won’t be paid off until at least February, there are still concerns about how the material aspects of the season could negatively impact the personal finances of millions. Hopefully we can find a middle ground where retailers and consumers can both thrive, leading to Merry Christmas and a very happy New Year.