It appears that Americans are starting to get their priorities straight. According to a recent survey by ING Direct American shoppers will be spending less this holiday season and will be putting more into savings then they have in years past.
Roughly 50% of the surveyed adults say they plan to spend $300 or more on holiday gifts. This is a 10% decrease from last year.
From the article:
“Gift givers will still visit the malls and shop online this holiday season, but it appears they’ll think twice before reaching into their wallets again and again,” said Arkadi Kuhlmann, President of ING DIRECT USA. “This year, Americans are putting a higher priority on saving than shopping.”
Interestingly, the groups that are changing to most are those in the northeast and the elderly. For northeasterners 57% say that they will spend more than $300 compared to last year when 71% spent that much. I have to wonder if this is due to the banking and investment industries taking such a hit this year? Of those 55 and older 61% will spend $300 or compared to last year’s 71%. Many 401(k)’s and other retirement vehicles have taken a huge hit in the past year or so and older workers may be working to replenish those accounts.
Of course this will hurt retailers this year as they are looking to crawl out of lowered sales.
The silver lining to this is that Americans are planning to save more.
About 40% are saying that they are planning to spend less this year and save more. Where will that savings go towards? Building an emergency fund, reducing debt, and adding more to retirement.
Even more encouraging is that almost 70% of those surveyed say they will continue their savings after the economy recovers! Almost 85% say that having money in the bank makes them happier than spending on stuff they don’t need. Yes! I can attest that I feel much better knowing that I have an emergency fund and savings putting way. The “stuff” I’ve bought in the past on impulse usually turns to guilt soon after and then I have more clutter in the house as well.
Though the economy takes a hit with this change it actually helps Americans in the long run. For too long we have been spending recklessly figuring that there will be more credit around the corner to help us out. The economic growth we’ve seen in past years was built up on the credit house of cards. Our current economy is what happens when the credit runs out and the house of cards collapses. We’ll be a much stronger economy when our spending is based on real collateral and not loads of debt.
Quick tip: Ease the bite of holiday spending by savings now for gifts. Set up an account and save up small amounts towards your gift goal (with ING Direct you can set up a sub-account). This way you have the cash for gifts and you don’t feel compelled to use credit.
What do you think of the ING Direct survey? Will you be spending less and saving more this holiday season?
{ 7 comments… read them below or add one }
Isn’t it way too early to have a report like this? I feel like you have to take this with a grain of salt for now. For the past few years it’s been obvious holiday sales have been less which is great cause stores sales have been better. Hopefully that is the case again.
.-= Craig´s last blog ..Kids Allowance – Are you and your child ready for it? =-.
Perhaps. If the economy starts to boom then who knows what will happen. Still, it’s interesting to see that people are starting to change the way they look at spending, debt, and saving. Hopefully folks will continue to save.
It would be nice, if true. It would be good to see an increase in the savings rate, even after the recession, and it would also be nice if holiday spending was down because we were focusing less on material things and more on being with each other.
.-= Miranda´s last blog ..Money, Material Things and Status =-.
Oh, you mean go back to the original intentions of the holidays and move away from the grand consumerism they ave turned into? Well, baby steps but it will be nice to see more savings.
I rarely think about the holidays (aside from my retail website) until….the holidays. I never been one to spend much if anything during that time of year. I guess my spending will be pretty much the same.
.-= Carla´s last blog ..Things you dont need to buy – reducing waste =-.
Somewhat the same here. We try to keep it pretty modest anyway so I don’t think our spending will change much. But I’ve heard of people who put themselves in debt for months buying holiday gifts. If folks like that are saving more then I think that’s great!
I think, it is OK to spend less specially during this holiday, as because, still the recession is not completely over.
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