If your relatives and friends fail to come up with gifts for you this holiday time, understand that it is not because you have been naughty.
You cannot blame the Grinch either. The bad guys who are stealing Christmas this year are known by scary names such as Soaring Costs and Rising Interest Rates.Read More »
Even those who earn more than $150,000 a year are cutting back almost as severely as those who earn less than $50,000 a year.
You are also more likely to be disappointed if you were hoping for jewelry, a watch, or electronics. People are reducing their holiday gift spending the most in those fields. Sorry about that.
We know all this because it is spelled out in a new survey by personal finance platform FinMasters. In a poll conducted with SurveyMonkey more than 1,500 Americans were questioned on their holiday spending.
The poll found that more than eight in every 10 people are cutting back on their holiday spending this year. They are struggling to keep up, with many facing rising interest rates on credit cards and loans.
Half of those polled said they intend to cut family members off their holiday shopping list. Right behind them on the cutting block are friends, who are being left off lists by more than four in every 10 of those polled.
Even the kids
It does not stop there. A quarter of the respondents are even spending less on holiday gifts for their children.
Those aged 30-60 are most likely to cut back in this category, whereas cutbacks are less likely among older and younger respondents, presumably because they are less likely to have children at home.
Only two in every 10 respondents to the poll say they do not plan to cut back on their holiday spending this year.
Where the cutbacks are
What are the gifts that are most likely to be skipped?
• Electronics—more than four in 10 said they would cut back in this category;
• Jewelry and watches—about four in 10;
• Cosmetics and perfumes—a third;
• Sports equipment—almost a third;
• Memberships—almost a third;
• Toys—a quarter; and
• Gift cards—a quarter.
Cutbacks are not limited only to people. Other categories identified by the survey in which people are planning to cut their holiday spending are:
• Decorations—about four in every 10 are planning cutbacks;
• Food—a third;
• Alcohol—a third; and
• Holiday travel—almost four in 10.
Everyone is cutting back
The cutbacks are consistent across people of all ages, genders and income categories. Eight to nine out of 10 people in all groups say they will reduce their spending over the holidays.
The people at FinMasters who conducted the survey say they expected to see more variation across gender, age, and income categories. They also expected to see people targeting a variety of areas of cuts.
They did not. Percentages varied by only a few percentage points across a wide variety of categories.
FinMasters executives also point out that their findings have a potentially more positive aspect. Lower spending means reduced demand for goods. That lower demand, in turn, cuts upward pressure on the prices of goods.
If people continue to cut back, inflation might slow down. The result could be that the Federal Reserve will feel less pressure to increase interest rates. With that will come some relief to consumers.
Perhaps you will receive that holiday gift in 2023. We can only hope.
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