The True Cost Of The Holidays

In the heat of the moment, surrounded by other desperate shoppers, it’s easy to get caught in the frenzy and add on that extra purchase at the cash. Everything about the holidays urges you to spend more, from the expectations of your family to the amazing deals found at your favorite stores. Before you know it, you’ve bought your way into debt with every present you leave under the tree. It’s not uncommon, as most people take on extra debt during the holidays, but it may surprise you to learn of the true cost of the celebrations. Let’s take a closer look at how much the country spends.

According to the NRF (or the National Retail Federation), roughly 93 percent of Americans celebrate the holidays. The lynchpin of many festivities is gift-giving, which is by far the most expensive part of any holiday, whether it’s Christmas, Hanukah, or Kwanzaa. The NRF estimates the average holiday budget is $967, and it breaks this spending down into three broad categories:

  • Gifts for friends, family members, and co-workers ($608)
  • Miscellaneous purchases on holiday food, greeting cards, and decorations ($218)
  • Non-gift holidays items used for themselves and/or their family ($141)

The NRF estimates the total retail sales for November and December amount to $682 billion — a 4 percent jump from last year. Though a significant sum, it pales in comparison to the numbers crunched by Deloitte economists. According to the company’s annual retail holiday sales forecast, 2017’s spending would increase by 4.5 percent from last year. Its experts clock the total retail sales for November to January to hit $1.05 trillion. Meanwhile, e-commerce sales are expected to rise by 14.3 percent to $114 billion.

Whether you measure it in billions or trillions, there’s no doubt the holidays are expensive, and in many cases, a challenge to accommodate. At the same time when Americans could be expected to spend $967, they’re facing financial difficulties that makes it impossible to pay for unexpected purchases. Roughly two-thirds of the country don’t have enough savings set aside to cover emergencies costing $500 or more — nearly half of what they’re expected to spend on the holidays.

Many of them make up the difference by using credit cards and personal loans. While practical financial tools to cover necessary bills, repairs, and medical expenses that must be paid, they shouldn’t be used to fuel retail therapy.

When your holiday leftovers aren’t the kind you can heat up in the microwave, the best way to undo holiday spending is with concerted efforts to save more. Starting from Black Friday, the two-month long shopping stint instills extravagant habits that you need to detox yourself from. Like any vice, it can be hard to eliminate these habits from your life, but you’ll be more likely to succeed if you rely on a support system as you tackle your debt.

Bring up the topic of money to the people you can trust, and see if they’re experiencing similar issues. Together, you can try to brainstorm ways to keep spending to a minimum while earning more money. At the very least, you can provide emotional support for each other as you attempt to save more in the New Year. Then check out this guide to saving money to find out what the pros suggest. Guides like this one share tried and tested techniques to limit your spending, so you can contribute more of your paycheck to your short term loans and credit card debt.

If, after several months this support network isn’t enough, then its time to widen your net. Talk to a professional financial advisor about options of debt consolidation and refinancing. These experts can develop a long term plan for chronic financial debt. There’s always a way to undo the financial debt of the holidays. Your solution may just be a little different from your neighbor’s.