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The pinch of inflation has been top of mind for Americans this year, and it’s affecting shoppers going into the winter holidays: 40 percent of holiday shoppers say that inflation will impact how they do their holiday shopping, according to a Bankrate survey. Besides simply spending less money, consumers told Bankrate they plan on shopping earlier, buying fewer items and looking for more coupons, discounts and sales.
Buying gifts that are more expensive than last year can cause real anxiety; however, changing your spending habits during the holidays doesn’t have to be joyless. Making a budget, taking care of your needs and allowing yourself peace of mind can be the biggest gifts you give yourself during the holidays.
Key Bankrate insights on holiday shoppers in 2022
- 95% of holiday shoppers who are changing their shopping decisions due to inflation are looking for ways they can save money this holiday season.
- 84% of total holiday shoppers will employ a money-saving tactic this year, including looking for coupons, sales and discounts.
- 40% of holiday shoppers plan on buying fewer holiday shopping items this year.
- 17% of holiday shoppers expect to feel pressured to spend more on holiday shopping than they feel comfortable with.
- 27% of holiday shoppers say the upcoming holiday season will put a strain on their budgets.
- 35% of holiday shoppers anticipate having funds specifically set aside or budgeted for this year’s holiday shopping.
- 38% of holiday shoppers expect to use credit cards — that they will pay in full to avoid interest — for their spending.
- 21% of holiday shoppers expect to use credit cards — that they will pay off over multiple billing cycles — for their spending
- 10% of holiday shoppers anticipate using a buy now pay later service while shopping for winter holiday items.
How recent inflation may impact your holiday spending this year
Consumer prices in November rose 7.7 percent from a year ago, according to the U.S. Bureau of Labor Statistics’ October report. Since inflation impacts production costs, such as fuel and labor, prices are expected to increase for many items and services that Americans will buy going into the winter holidays.
As Americans adapt to high inflation, many plan on spending around the same amount of money on fewer items. Shoppers say they plan on spending an average of $880 on retail, while spending $575 on experiences — 5 percent less than last year, according to the latest holiday spending survey by Deloitte. Shoppers are expected to buy around nine total gifts, according to Deloitte, compared to last year’s 16, as rising prices lead to strained budgets.
Additionally, general food prices going into Thanksgiving have risen 10.9 percent year-over-year, while grocery prices have risen 12.4 percent, according to the Bureau of Labor Statistics.
Those price increases will have tangible effects on how people shop. Slightly less than half (45 percent) of the lowest-income shoppers who make a yearly household income of less than $50,000 will change their shopping habits this holiday season — the highest of any income bracket.
Source: Bankrate Winter Holiday Shopping Survey, Aug. 17-19, 2022
How to manage financial stress and anxiety during the upcoming holidays
After a year of lockdowns in 2020 and further COVID-19 effects in 2021, you may be excited to celebrate big this holiday season, even if the budgeting math is trickier due to inflation.
As a result, you may feel pressure to spend a lot of money on the holidays in 2022. Read on for ways to celebrate the holidays and spend time with your loved ones, without facing extra financial stress.
1. Discuss with friends and family about low-cost ways to celebrate
“If the holidays give you financial stress and anxiety, talk with your loved ones about an alternative format to holiday spending and gift-giving this year that takes the pressure off of everyone,” says Ilian Georgiev, CEO and co-founder of Charlie, a personal finance app.
When discussing, Georgiev suggests mentioning the following ideas:
- Reduce spending by setting spending limits.
- Skip the gift exchange altogether and focus on celebrating with your loved ones.
While you may feel like a grinch suggesting these types of ideas, your loved ones will hopefully understand and may even empathize with you — especially considering the year we’ve all had and the financial hardship it’s brought to millions.
“Always remember, you are absolutely not the only one who is having a difficult time with the holidays this year,” says Dr. Georgia Gaveras, chief psychiatrist and co-founder of Talkiatry, a New York-based mental health service provider. “Try managing your anxiety through transparency and planning. You may end up being a hero this holiday season if you propose limiting the number of gifts everyone buys.”
2. Get comfortable with saying no to additional spending
Although the holidays encourage generosity, that doesn’t mean you should ignore your own needs. If you feel pressured to spend more on gifts or lavish parties than you feel comfortable with, give yourself permission to just tell people “No.”
Have an honest conversation with your loved ones ahead of the holidays. Explain that you will be setting a budget and are setting boundaries around how much you will be spending. And then stick to it — no one knows your budget better than you do, and you are your best advocate for yourself.
If you still find yourself becoming overwhelmed, see where you can cut back on what is less important to you in order to spend your resources on what is.
3. Establish a realistic holiday spending budget
Unexpected expenses can add up quickly during the holidays if you’re not sure how much you plan on spending. Making a budget can help you know how much you want to spend and how you want to spend it.
Sit down with your budget and consider how much money you want to allocate for the holidays. This will vary from person-to-person, and there’s no “right” amount that fits people across the board. Consider how much you spent on the holidays last year, based on your bank statement, and ask yourself if this year’s priorities are similar to last year’s budgeting priorities. Also, consider that, due to inflation, a $1,000 budget from 2021 might not go as far with inflation. Choose your total budget amount based on the holiday savings or general discretionary funds that you have.Try to avoid using emergency savings for the holidays.
Then, consider categories. Not every category will be given equal weight. If your favorite part of the holidays is hosting dinner at your house, then consider prioritizing decorations, food and activities in your budget, instead of spending more on gifts.
Avoid inflating your budget out of a sense of obligation. The holidays can be a great way to relax and reward yourself after a busy year, but it may feel less relaxing if you’re still paying it off months later.
Here’s an example of how a holiday budget may look:
Holiday spending budget example
|Gifts for others||$400|
|Gift- wrapping materials and cards||$60|
|Hosting dinner at my home||$120|
|Outings/activities with loved ones||$100|
4. Make shopping lists and stay organized
A shopping list can help you keep track of your food shopping, gift shopping and more — while making sure you’re sticking to your budget.
To make your lists, write down everything where it can be viewed at a glance. For gift lists, you can break down your spending per person, what you plan to buy for each person, where you plan to buy from — either in person or online — and any discounts you find. For food shopping, consider if you need to buy an ingredient ahead of time, like a frozen turkey, or if you plan on buying food that might experience shortages this year, like meat and butter.
5. Download apps for rewards, discounts and/or cashback
You may know to take advantage of credit card rewards, but check out apps and browser extensions that also allow you to receive rewards and cashback. Cash back sites can also allow you to check prices for the best deals on popular items.
Popular cashback apps include:
- Rakuten, which offers both online and in-store deals at stores like Walmart and Nike, and has special savings for the holidays.
- Ibotta, which includes big deals on grocery items, and lets you connect grocery loyalty accounts.
- Dosh, which allows you to book hotels and offers up to 40 percent cash back, among other deals.
Additional tip: Consider a free gift-organizing app like GiftList or Christmas List App to keep track of wish lists and budgets.
6. Practice mindfulness when you’re feeling stressed
It’s a stressful time of year and sometimes taking the time to pause and recognize just that can be helpful in and of itself.
If you’re worried about inflation and other financial pressures, be sure to give yourself some grace and take the time to understand your feelings so that you can deal with them, breathe, reset and reframe the situation.
“If you find yourself feeling overwhelmed, take a step back and practice mindfulness by bringing your attention to the present moment,” says Jolie Weingeroff, a clinical psychologist who sees clients in New York and Rhode Island.
Two techniques Weingeroff suggests include:
- Box breathing: Trace the outline of a rectangle — like a window — and inhale along one edge, exhale along the next, and repeat.
- See three things, hear three things, feel three things: Cycle through and identify things in your environment that you see, hear, and can feel.
7. Find some joy and practice self-care
When feeling stressed out, it’s easy to forget about treating yourself — especially when the stress is financially- and holiday-related. But treating yourself doesn’t have to mean buying yourself a material item; it can also mean taking a walk or letting yourself take a break.
Take a step back from the chaos and do something that brings you joy. Maybe it’s coloring or taking a long, hot shower. Whatever it may be, don’t forget that you can and should treat yourself.
After all, the holidays are also meant to be a time for relaxing and recouping.
The holidays can be a stressful time of year. Add in a related recession and you’ve probably found yourself with even more feelings of stress and anxiety than the year before.
Remember to give yourself some grace and don’t feel bad if you can’t celebrate the way you may have in years past.
- 13 ways to manage your money during a recession
- 11 ways to save money at the holidays
- Navigating the holidays if you took a financial hit this year
- 7 ways to manage financial stress during trying times
Bankrate.com commissioned YouGov Plc to conduct a survey on winter holiday shopping. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,415 adults, including 1,813 winter holiday shoppers. Fieldwork was undertaken between August 17 – 19, 2022. The survey was carried out online and meets rigorous quality standards. It employed a nonprobability-based sample using quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.