This holiday season, the average shopper expects to shell out $500, and nearly eight out of 10 consumers (76 percent) admit to overspending on holiday purchases by an average of $263 in the past – according to TD Bank’s Merry Money Holiday Spending Survey.
The survey found that 62 percent of consumers prefer getting gift cards as a holiday present, with 50 percent of Americans purchasing them so friends and family can “get what they want,” as well as being easy and convenient to give (24 percent).
With holiday overspending reaching new heights, more than half of TD’s survey respondents (52 percent) create a budget – and eight-in-ten say they actually stick to it, up from 70 percent in 2016. With such an uptick, what motivates consumers to create a budget? Sixty-three percent say its part habit, and 39 percent say they spend too much over the holidays.
“Holiday shopping should not create any added stress to such an enjoyable time of year,” said Jason Thacker, Head of U.S. Consumer Deposits and Payments at TD Bank. “These findings only further emphasize that by establishing a budget and exploring gift alternatives, people can still make meaningful memories and get the most out of the season.”
Buying (and re-gifting) the perfect present
How many people re-gift holiday presents? More than half (56 percent) of respondents admitted to previously re-gifting a present, noting that the top reasons for re-gifting include thinking that someone else would like it more (65 percent) as well as disliking the gift (40 percent).
Nearly one-in-three (32 percent) women say gifts for their significant other are the most stressful to buy; men concur (38 percent). Both men and women agree that gifts for children tend to be the easiest (34 percent and 45 percent, respectively).
‘Tis the season to be spendy
New Yorkers (80 percent) and South Floridians (78 percent) have the highest level of holiday overspend in the country, compared to the national average (76 percent). Further, New Yorkers overspend by roughly 21 percent ($318) more than the average American ($263).
Top reasons for excessive spending include: spending more on gifts than expected (71 percent) and buying gifts that were not on the original list (57 percent).
But while the majority of holiday shoppers have overspent in the past, nearly six-in-ten (59 percent) expect to pay back their spending before February 2018.
Millennials blow budgets on holiday parties and office gift exchanges
Experience-driven millennials far overspend their budget (72 percent) on holiday-related events compared to members of Generation X (24 percent) and baby boomers (18 percent).
Millennials tend to overspend the most on:
- Gifts for friends and family (49 percent)
- Purchases for themselves (33 percent)
- Candy/desserts (33 percent)
- Home decorations (31 percent)
- Wine/Beer/Spirits (30 percent)
But amidst this holiday overindulgence, this younger generation does have some frugal habits. Most millennials (65 percent) create a holiday budget, in comparison to 56 percent of Gen Xers and 35 percent of baby boomers. Additionally, millennials (67 percent) are far more likely to re-gift a present compared to the average American consumer (56 percent).
“Time and time again, surveys have shown that in many ways, millennials are more financially responsible than members of older generations. To many young adults, re-gifting is the most practical thing to do and if it saves you money in the process, it’s not a bad idea,” said Amanda Dixon, financial writer and expert, who analyzed the survey.Wake up Right! Subscribe to our Morning Briefing and get the news delivered to your inbox before breakfast!