Holiday Spending Expected to Reach a Record High This Year

• A recent report by the National Retail Federation stated that consumers are expected to spend between $843.4 billion and $859 billion during this year’s holiday season.
• The increase in spending is due to several restrictions caused by the pandemic, such as travel restrictions which led people to save more money last holiday season.
• Although the economy is returning to normal, there is still a supply chain issue, causing people to want to buy their gifts earlier to avoid not being able to buy any gifts at all.

With this year’s holiday season right around the corner, it is the best time for businesses to increase their profits as consumer spending will be increasing significantly. As the economy is returning to normal, consumers are expected to spend between $843.4 billion and $859 billion, according to a report released by the National Retail Federation (NRF). 

During the 2020 holiday shopping season, which began with Black Friday and Cyber Monday and lasted until the end of the year, consumers spent $777.3 billion. As the 2021 holiday season is fast approaching, the NRF is projecting an 8.5% to 10.5% increase in holiday spending. 

What Caused Holiday Spending to Increase?

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During the pandemic holiday season, numerous travel restrictions did not allow people to travel for the holidays. As traveling is a staple during the peak of the holiday season for the average American, many people could not spend the money on this luxury. Therefore, those who saved money last year due to not traveling will likely spend that money on holiday vacations this year since there are now fewer travel restrictions. 

Tips for the Upcoming Holiday Season

Shop Online

Shopping in person during the holiday season could be very chaotic as many people are also trying to complete their shopping. Therefore, by shopping online, you can avoid crowds and buy items online that may be out of stock in the store. 

Purchase Gifts Early

Although the economy is returning to normal, there is a supply chain crisis. Many manufacturers are struggling to produce a sufficient amount of inventory to keep up with the demand of holiday shoppers. For that reason, completing your holiday shopping early can ensure that all of your gifts are purchased well in advance and that the supply chain crisis does not affect your holiday shopping. 

Cost-Effective Gifts

Although holiday spending is projected to be higher than the previous year, it does not necessarily mean you have to buy expensive items. Most loved ones are not looking for expensive and flashy gifts. Instead, the holiday season is about spending quality time surrounded by your family members and friends. So if you have a tight budget, time and love are great alternatives to traditional holiday gifts. 

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Homemade Gifts

For some people, to show your affection and love towards them, spending a large sum of money on their gift is not the ideal approach. Instead, focus on gifting them with a sentimental homemade gift, something that money cannot buy but still means a great deal to the gift recipient.  

Gift Card

During the 2020 holiday season, a survey indicated that 34% of the people who received gifts returned them to their respective store in exchange for something they wanted instead. Therefore, presenting your loved one with a gift card can be more time-efficient and allow the recipient to purchase exactly what they want. A gift card is a safe go-to, and it will enable the consumer to spend it however they please.

With the holiday season approaching, we always want to gift our loved ones with as many presents as possible. However, when doing your holiday shopping, be aware of your spending to avoid going over your budget. 

Although the holiday season is a time when people may spend more money, you don’t want to come out of the holiday season in financial hardship. Remember to properly prioritize your essential expenses, such as bills, before spending money on holiday gifts.

Do you plan to spend more this holiday season than ever before? Let us know in the comment section below.

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