We’ve all heard of the wide and growing wealth and income gap in the U.S. Apparently, these conditions lead to a “gift gap” during the holiday season, according to credit counseling agency Consolidated Credit.
Specifically, Americans who are still paying for last year’s gifts say they will spend less this year.
Consolidated Credit surveyed 1,264 Americans, focusing on those who have sought debt relief options and who are looking for ways to save money.
Many Are Still Paying Off Last Year’s Holiday Gifts
Sadly, over 45 percent stated they got into debt last holiday season. Of the respondents who incurred holiday debt last year, more than 70 percent are still paying it off while almost 30 percent have paid it in full.
Statistically, the holidays are the worst time of the year for family budgets, the company said. Long gift lists lead to overspending that ends up becoming debt.
With that in mind, Consolidated Credit wanted to know how families facing challenges plan to get through the season without making financial burdens worse.
Spending Less Due to Job Loss or Pay Cut
Nearly 25% said they are spending less due to a job loss or pay cut. The unemployment rate according to the Bureau of Labor Statistics last November was 4.6 percent as compared to 4.1 percent in November 2017 so the survey may suggest that lower wages or underemployment may be a factor.
The National Retail Federation says Americans will spend nearly $1,000, an increase of around 4 percent, but that’s a national average. Almost 85 percent of respondent reported they plan to spend less this year while 17 percent said they were going to spend more.
Most survey respondents said they would spend up to $300 while only 6 percent said they would spend over $800. Nearly 32 percent will buy gifts for their pets and close to 60 percent will donate to charity.
42.15 percent of survey respondents purchase gifts using credit cards, over 38 percent use gift cards, nearly 35 percent use a holiday savings account and over 20 percent use a year-end bonus.