Ho, Ho, Ho When Budgets are Low

Indebted families scale back to avoid taking on more holiday debt.

Graphic displaying how indebted families scale back holiday budgets

The holidays are hard on any budget, but that financial stress is compounded when the household is already facing challenges with debt. With that in mind, Consolidated Credit surveyed over 2,500 people who have reached out to them for help to see how they’re doing at budgeting and spending this holiday season.

The results show that the majority of these families who have already stared down the hard road toward freedom from debt are scaling back this year in order to avoid adding to their financial stress. As a result, 89 percent plan to spend less this holiday season, doing everything from scale back on entertainment budgets to limiting the number of people to gift.

According to additional survey results, two in five indebted families (40 percent) will spend the 80 percent or more of their total holiday budget on gifts, with only the remaining 20 percent to cover things like entertainment and travel. These families who’ve already learned how burdensome credit card debt can be have found smart ways to avoid end-of-year debt. In fact, 23 percent have shopped throughout the year to avoid holiday debt here in December.

Avoid bad holiday money habits

The survey results did reveal a few financial behaviors that should land some indebted families on Santa’s financially naughty list.

  • 28% of respondents will self-gift this year
  • 26% will rely at least partially on credit cards to pay for holiday purchases
  • 34% wait until just before the holidays to shop

“If you’re still spending money putting the final touches on your holiday plans, take a minute to really consider whether each last touch you make is really worth the debt you’re likely to be taking on at this point in the shopping season,” says April Lewis-Parks, Director of Community and Public Relations. “Put the cards away, stop spending and use the time you free up by not shopping to really enjoy the holiday season with your family.”

Complete survey results

Do you plan to spend more or less this year?
More 11.05%
Less 88.95%
Will you spend more or less this season?
If you plan to spend MORE, why?
The economy is better 6.98%
My family grew 25.97%
I have more income 10.08%
Big year-end bonus 3.88%
To make my family happy 10.85%
I’ve been saving more 17.05%
Why spend more for the holidays?
If you plan to spend LESS, why?
The economy 15.73%
I didn’t save as much this year 23.71%
I have less income 23.47%
I’m doing a gift swap this year 8.08%
I plan on making gifts this year 6.57%
Why spend less for the holidays?
What’s your total holiday budget?
$0 – I don’t do the holidays 6.81%
$20-$100 15.81%
$101-$200 16.15%
$201-$300 15.64%
$301-$400 11.77%
$401-$500 12.36%
$501-$600 6.48%
$601-$700 3.41%
$701-$800 4.50%
More than $800 7.06%

What's your total holiday budget?

What percentage will be used for gift giving?
0-20% 18.51%
21-30% 7.40%
31-40% 3.89%
41-50% 6.85%
51-60% 5.54%
61-70% 5.71%
71-80% 11.24%
81-100% 40.87%
Budget for gifts
How many people are you shopping for?
1-5 48.77%
6-10 33.50%
11-15 11.42%
More than 15 6.30%

People you're gifting

Did you incur debt last holiday season?
Yes 51.99%
No 48.01%
Debt incurred last year?
If so, are you still paying off last year’s debt?
Yes 70.73%
No 29.27%
Is last year's debt paid off?
How do you plan to pay for the holidays?
Cash/prepaid – I save throughout the year 49.68%
Cash/prepaid – I use my year-end bonus 27.39%
Credit 25.80%
Gift cards / rewards 18.01%
Paying for the holidays
When do you do the bulk of your shopping?
Year-round as items go on sale 23.96%
Right after the holidays the year prior 6.45%
Black Friday 17.89%
Cyber Monday 13.16%
Throughout November 26.62%
Right before the holidays in December 34.41%
When do you shop?
Will you buy any gifts for yourself?
Yes 27.92%
No 72.08%
Are you self-gifting?
How much of your budget will be used for entertaining?
0-20% 75.62%
21-30% 15.75%
31-40% 3.45%
41-50% 2.55%
51-60% 1.29%
61-70% 0.47%
71-80% 0.52%
81-100% 0.35%
Budget for entertaining
Will you travel this holiday season?
Yes 16.66%
No 83.34%
Traveling for the holidays?
If you’re traveling, are you…
Flying 18.28%
Driving 77.55%
Cruising 1.57%
Taking public transit 2.61%
How will you travel?
How much of your budget will be used on travel?
0-20% 76.82%
21-40% 14.58%
41-60% 5.21%
61-80% 2.08%
81-100% 1.30%
Budget for traveling

Use this infographic

<a href="https://www.consolidatedcredit.org/infographics/ho-ho-ho-budgets-low/" target="_blank"><img src="https://www.consolidatedcredit.org/wp-content/uploads/2017/04/holidaysurvey_infograph.jpg" alt="Graphic displaying how indebted families scale back holiday budgets" class="img-responsive" /></a>