Lower-Income Families to Opt-Out of Holiday Spending
- A recent report released by Deloitte showcased that 11.5% of people will not be spending money during the holiday season and opt-out.
- Of the 11.5% non-participants, 2 out of 3 respondents live in households where the household income is less than $50,000.
- Although there will be fewer people spending money this year, retail sales are expected to increase as the majority of spenders are those who are from high-income households.
With the holiday season approaching, millions of people will be conducting their holiday purchases during Black Friday and Cyber Monday. Although there are reports of consumer spending projecting to be higher than previous years, a report released by Deloitte showcased the fact 11.5% of consumers will not be partaking in the holiday shopping season.
Why Lower-Income Families Are Opting Out
Of the 11.5% who answered they would be opting out of holiday spending in the upcoming holiday season, 2 out of 3 had an annual household income of less than $50,000. As the United States' median household income is $67,521, most of those not partaking in holiday shopping live below the poverty line.
Image Credit: Shutterstock.com
The COVID-19 pandemic has caused the inflation rate to reach its highest level since 1990, leading many corporations to increase the prices of their goods and services to maintain the same level of profits and purchasing power pre-COVID-19. Thus, the increase in expenses across industries makes it more difficult for lower-income households to buy gifts and partake in holiday celebrations.
Why Holiday Spending is Projected to Increase
Per the same Deloitte report, although a higher percentage of people will not be buying gifts for their loved ones, holiday shoppers are expected to spend an average of $1,463. That is a 7-9% rise, as upper-income households are expected to spend a higher portion of their money on this year’s holiday season.
During the pandemic, those in upper-income households had the luxury of having a large sum of money in their savings, which aided them in paying their necessities until the economy recovered. Now that the economy is recovering, those in higher-income households have the opportunity to use their money and purchase an abundance of gifts for their friends and family.
How to be Mindful When Holiday Shopping
Whether online shopping through your web browser or going to the physical store, it is critical to remember to stick to your budget whenever holiday spending is being done. It is essential to create a budget that fits your disposable income level and stick by it.
Image Credit: Shutterstock.com
Recommended Read: Four (4) Tips to Avoid Debt While Holiday Shopping
Repercussions of Not Following a Budget
If budgeting or other money-saving strategies are not used to prepare for holiday spending, it could result in overspending. Overspending could lead to increased credit card debt, which can negatively affect your credit report and score. Furthermore, due to the increasing amount of money that needs to be paid back to the credit card companies, it may become challenging to continue holiday shopping. It may cause you to permanently opt-out of purchasing gifts during the holidays.
The holiday season is supposed to be filled with good times, great people, and even better memories. Implementing the tactics mentioned above will help ease your mind and save more money as you know the money-saving tips will help you spend more during the holiday season guilt-free.
Recommended Read: This Rule Will Keep You From Overspending on Holiday Gifts
Alternatives to Holiday Shopping
With the increasing prices, it has become difficult for those living below the poverty line to express their affection towards their loved ones in the form of gifts. However, those who cannot purchase gifts, or are opting out of holiday shopping, can still enjoy the holidays with their loved ones. Memories and time spent together can make a great holiday gift for family members and loved ones.
Recommended Read: Top Gift Ideas for College Students
What are your thoughts on people opting out of holiday shopping? Let us know in the comments below.