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The aftermath of the holiday season can leave many consumers spending above their means. Some shoppers even consider taking out a personal loan to finance larger purchases. Data from Bankrate found that 27 percent of shoppers will go into debt for holiday shopping — especially alarming in the context of high inflation.
In many families, women take the brunt of gifting, which is expected to reach as high as $960 billion, according to the National Retail Federation. The weight of finding the perfect present for everyone in your life can lead to major problems outside of spending, almost half of women reported financial stress hurting their mental health, according to Ellevest.
With women at the forefront of holiday season spending, it is important to understand the role that they have in trends as well as how to enjoy the season’s festivities with financial wellness in mind.
Purchasing power statistics
- By the year 2028, women will own 75 percent of the discretionary spending.
- 49 percent of women say that their mental health has suffered at the hands of financial stress.
- 57 percent of shoppers planned to spend money on themselves last holiday season.
- Men have 20 percent more personal loan debt than women.
- 34 percent of women versus 21 percent of men said they were planning to spend less in the 2020 holiday season.
- On average, 14.1 percent more was spent on holiday shopping in 2021 than in 2020.
- Only 5 percent of women of color hold C-suite leadership roles.
- Globally, 89 percent of women carry primary or shared responsibility for household chores, daily shopping and food preparation.
- 36 percent of women worry about their financial well-being on a daily basis.
- Men carry 2 percent more credit card debt than women.
Recession and shopping trends
Inflation is an unavoidable reality, especially during the past holiday season. Sarah Foster, U.S. economy reporter for Bankrate, notes that “inflation might be just as much a part of Americans’ celebrations as the gifts and the gatherings.”
As the Federal Reserve works to quell building inflation, the central bank has steadily increased the benchmark rate. Following the December Fed meeting, the target rate is set at 4.25-4.5 percent. This increase can, as Foster noted, hurt holiday shopping spending and make everything from travel, and gifts to wrapping paper cost a bit more. Simply, the high inflation decreases the worth of the money in your pocket that you intend to spend on holiday gifts.
One way the shift in purchasing power can be seen is by looking at the Consumer Price Index (CPI). This is the measure of inflation at the consumer level. Just a year ago, the CPI sat at 276.7, which in mid-December was 298.1. This increase represents the jump in prices over time. Consider the impact that women have on global products and how higher prices may disproportionately impact female shoppers this season and beyond.
- The global beauty industry is predicted to be worth $571.1 billion by 2023.
- Half of products marketed towards men are typically purchased by men.
- Women entrepreneurs tend to borrow less money than men.
- Women contribute to 37 percent of the Global GDP.
- Over 80 percent of purchases and purchase influence are made by women.
- Women make 91 percent of new home purchases.
- Female borrowers have an average debt 9.6 percent higher than male students, one year following graduation.
- 66 percent of consumer wealth will belong to women in the next decade.
- 59.4 percent of men took out personal loans in 2021, over 44.3 percent of women.
- Women globally tend to spend three times as many hours on unpaid domestic and care work compared to men.
Financial wellness tips
With high prices expected to remain present past the holiday season it is wise to consider how to prepare. This is especially important for women who face a variety of challenges that men do not have to consider. With this in mind, check out Bankrate’s winners for Visionaries in the finance space and the following tips.
Apply for a home equity loan.
If you have several types of debt that have built up over time it may be wise to apply for a home equity loan to consolidate. The goal of this approach is to pay down your debt at a faster rate and place yourself in a better financial position. With a home equity loan, you simply borrow against the equity in your home.
Reassess your budget.
If the looming recession makes you rethink your spending habits, a good first step is to dive deeply into your monthly budget. Consider how much you currently spend and how you can decrease your outputs. Taking control of your budget will help mitigate any financial issues if bad economic times lay ahead.
Debt management plan.
Another way to get your debt under control is to consider a debt management plan. These are different strategies to put in place to eliminate large amounts of incurred debt. To do this you can either work with an outside counselor, company or do it yourself. Either way, it can be an important first step in getting control of your finances.