Financial Strain Leads to Overtime Work and Budget Cuts
A recent report by Empower reveals that the soaring prices are significantly affecting the holiday spending habits of Americans this season. The survey, which included responses from over 1,000 individuals, showed that a staggering 74% of respondents cited inflation as a major influence on their holiday expenses. To cope with the added financial burden, 31% of participants reported working extra hours or taking on additional gigs.
Holiday Traditions and Travel Plans Scaled Back
The study also highlighted the measures taken by individuals to mitigate the impact of inflation. More than 30% of those surveyed stated that they were cutting back on holiday traditions to save money, while over half of the respondents decided to forgo travel plans entirely. Of those, 46% made this choice to reduce costs.
“The survey shows that over a third (34%) are trimming their budgets in favor of saving this year, while others are cutting back on buying gifts or non-essential expenses like dining out to stay on track,” explained Courtney Burrell, a financial professional at Empower.
Varied Budget Allocation and Expenditure Plans
When it comes to holiday gift shopping, the study found that 37% of participants plan to spend less than $250, while more than 10% are budgeting more than $1,000. With individual priorities differing, Burrell emphasized the importance of allocating the holiday budget according to personal preferences.
“How you allocate your holiday budget will depend on what’s most important to you – this year, you may prioritize travel to visit family that you typically only see during the holidays over decorations or cut back on social commitments in order to give yourself a larger budget for holiday gifts,” Burrell suggested.
Concerns Over Rising Credit Card Debt
Despite the financial strain experienced by many Americans this holiday season, it has not deterred them from participating in shopping sprees. The Thanksgiving holiday weekend saw a record-breaking number of Americans hitting the stores. However, experts have raised concerns about the increasing levels of credit card debt held by consumers. With high interest rates, there are worries that more individuals will struggle to repay their debts, potentially leading to a crisis.
As the holiday season progresses, Americans are navigating the challenge of balancing their desires to celebrate with their financial limitations. The impact of high prices and inflation continues to influence spending habits, prompting individuals to explore various strategies to manage their budgets effectively.