Making Ends Meet: Some Coloradans are cutting back this holiday shopping season
It's tougher this year to make ends meet during the holiday shopping season, and economists predict that Americans will be spending a little less money on gifts this year.
Robert Persichitte is a professor at MSU Denver, and a CPA/PFS, CFP®, CFE. He says many people have overspent on Christmas since the pandemic hit. Now, they're realizing, they can't afford an expensive Christmas and are cutting back this year.
"Prices are high and times are getting a little bit tighter than they were last year. It's maybe harder to find a job, maybe harder to get that big raise, and so we're not seeing the same type of spending," said Persichitte.
A survey by Gallup revealed that Americans will spend an average of $923 on Christmas or holiday gifts this year. That's down slightly from $932 last year.
Data from the Gallup also showed that holiday spending in the first two years of the pandemic was down about $100. However, this year, people's spending habits are similar to what was seen in 2019.
What the broader studies are showing is that during COVID, people built up their savings and maybe got out of debt, and those trends are now reversed," said Persichitte. "And what we're seeing is people who did have some money saved up in general across the board, really don't have it now. "
Persichitte also said it's easy to overspend during the holiday season. He added that many people don't make rational decisions this time of year, especially when it comes to finding that perfect gift for children or loved ones.
He said people buy gifts based on emotions and feelings. Plus, many people are purchasing those gifts between Thanksgiving and Christmas. That makes it much more difficult to pay a large amount of money in a short amount of time.
But if you feel you cannot afford it, Persichitte recommends not basing the success of your holiday on how much you spend. Instead, have those open and honest conversations with your loved ones.
"Talk to them and say, 'Hey, would you like me to buy you a present or would you like to spend some time together or go out after the holidays,'" said Persichitte. "Try to remember especially with those little kids, especially with the younger kids, they just want to be around you."
Persichitte recommends getting ahead on saving for the holiday shopping season. He encourages you to start putting money aside each month, for the following year.
The survey by Gallup also revealed that most people plan to spend at least $500 on Christmas this year, including 35% who say they will spend $1,000 or more.