The holiday season is about giving and not receiving, but are parents giving too much? You may be surprised to learn just how much parents are spending on holiday presents this year, although if you're a parent yourself maybe not. Thanks to online shopping it's easier than ever to simply click a button on your computer and purchase those 'must have' gifts for your kids and worry about the bills later. While the average holiday spend was up last year from the year before, consumers are planning to spend even more this year.
According to the National Retail Federation, the average parent will be spending 4.1% more this year than they did last year. That means the average parent will be spending $1000 this year on gifts, up from about $968 last year. That's a lot of money! The pressure as a parent to make sure their child wakes up to a tree full of presents with every item on their Christmas list wrapped neatly under the tree has lead parents to often go into debt during the holidays. Money Confident Kids states that 45% of parents will actually go into debt to get everything from their kids' lists, despite the cost.
Because of this increased spend during the holiday season, NerdWallet says that more and more people are using credit cards to pay for gifts. While paying by credit card is becoming more and more popular due to the increase in online shopping and the security that credit cards provide, it also takes many people who use credit longer to pay off their bills.
"Holiday credit card users anticipate it will take them 3.2 months to pay off their holiday charges this year, on average," NerdWallet writes. "Those who used a credit card for their 2017 holiday shopping say it took 2.3 months, on average, to pay off those balances." They also found that almost 40 million Americans are still paying off last year's holiday shopping bills.
Parents often spend more during the holidays as well because, as Money Confident Kids reports, many wait for the holidays to make big purchases for their kids. The site also found that a whopping 59% of parents admit to spending more on holiday gifts for their kids than they had planned to with almost 50% admitting they simply don't stick to their holiday budget.
To try to avoid overspending this holiday season, NerdWallet personal finance expert Kimberly Palmer suggests having a budget and sticking to it. “It’s easy to let the spirit of the season turn into a spending tsunami that ends up costing more than expected,” Palmer said. “The holidays carry so much excitement and emotion, and for many of us, spending is part of the celebration. That’s why getting an early start on budgeting is so important.”
Well, maybe next year.