Although the holiday season is typically a time of joy and excitement, it can also be a huge source of stress for many people, especially those who overspend on gifts, entertaining and more.
In fact, installment loan provider Affirm found in a new survey that 7 in 10 Americans typically go over budget during the holidays. And despite the fact that the COVID-19 pandemic has reduced many Americans' spending power, this behavior will continue uninhibited in 2021 — 48% of respondents expect to spend more money this year because they couldn't celebrate the holidays like they usually would in 2020.
Gift givers plan to splurge on memorable experiences for their loved ones
Instead of spending on physical gifts, over half of Americans (54%) predict they'll spend more this holiday season on experiences — such as traveling or attending and hosting partie. This sentiment can also be found in the kind of gifts respondents plan on giving to their loved ones this year, which include:
- Memorable experiences, such as tickets to a concert or sporting event (42%)
- Electronics (29%)
- A vacation (26%)
- Clothing (25%)
And they don't plan to skimp on these gifts either, as Affirm discovered that consumers plan on spending almost $400 on their significant other and over $300 for each member of their immediate family.
And on the receiving end, respondents hope to get gifts similar to the ones they plan on giving — vacations (27%), new clothes (26%) and memorable experiences (24%).
Respondents worry about the holidays' impact on their finances
As the holidays draw nearer, it's little surprise that Americans worry about how the season will affect their finances. While over 50% of respondents report that they usually have anxiety over their holiday gift list, some other concerns expressed include:
- Staying on budget (41%)
- Incurring long-term debt (31%)
- Paying for shipping costs (28%)
- Incurring late or hidden fees (26%)
Long-term debt in particular is a huge issue for many, as a recent report from Northwestern Mutual found that consumers spend just under a third of their monthly income on paying down personal debts.
This might explain why 61% of respondents say they don't wait for Black Friday and Cyber Monday to start on their holiday gift shopping. The Affirm survey showed that 1 in 5 respondents actually started shopping for the holidays in September, as 23% say they do so because they want to budget better for their gifts.
Still, according to the report, this isn't the only change taking place this year either. Consumers young and old alike have spent more money shopping online during the pandemic, and the 2021 holiday shopping season may serve to reinforce this practice further. Over half of respondents (57%) expect this holiday season to be busier than usual, which may point to why 72% say they’ll shop online to avoid crowds this year.
Methodology: On behalf of Affirm, OnePoll conducted an online survey of 2,000 Americans in August 2021.