Inflation won’t slow holiday shopping for many consumers, survey finds

Most consumers plan to spend the same amount or more on holiday gifts compared to last year, according to a survey by Klaviyo. (Stock)

Rising costs due to inflation have prompted many consumers to tighten their budgets, especially on discretionary purchases, according to a recent survey by Klaviyo. However, many said it wouldn’t slow down their holiday shopping.

The majority of respondents (67%) said that inflation — which increased by 7.7% per year in October — has already influenced their buying decisions. To offset price increases, most consumers said they spent less on discretionary purchases like hobbies, out-of-home entertainment, clothing, jewelry and home decor.

Yet despite shrinking budgets, the survey indicates that 65% of consumers plan to spend the same amount or more on holiday gifts compared to last year.

Most shoppers spend between $250 and $999 on Christmas gifts each year, and that’s expected to stay the same for the 2022 holiday season, according to the survey. However, younger generations are more likely to increase their spending than older generations.

“According to research, consumers always plan to spend – a lot – during the holidays,” Klaviyo’s survey said. “Different demographic groups pick and choose their discretionary spending more carefully, making ends meet by increasing budgets for some categories and decreasing them for others.”

Keep reading to find out how you can budget your vacation expenses. And if you’re interested in financing options for larger purchases, you can visit Credible to compare interest rates on a variety of financial products without affecting your credit score.

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Consumers buy their holiday gifts earlier

According to Andrea Woroch, author and budgeting expert, rising costs mean consumers are more concerned about how to pay for vacations than before.

An emerging trend is that consumers are buying earlier. More than half (55%) of consumers had planned to start their holiday shopping 2022 before Halloween, according to a Bread Financial survey.

“The reason for that is because they’re worried they won’t have enough money in November and December or prices will keep going up for popular gifts,” Woroch said.

By getting a head start on shopping, consumers can “spread their purchases over a few pay periods and manage [their] better cash, so [they] don’t rely on those high-interest credit cards,” Woroch added.

Another emerging trend is for retailers to roll out promotions long before Black Friday, she said.

“The key to affording the vacation is setting a budget, tracking purchases so you don’t overdo it, and looking for easy ways to free up money in your current budget to help pay for expenses and seasonal shopping. That way you can enjoy the season stress-free,” Woroch said.

If you are considering borrowing money to finance your holiday shopping, you may want to consider a Credit card 0% APR or a personal loan for larger purchases. You can visit Credible to compare multiple rates and lenders for free, all in one place..

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Ways to Budget Holiday Spending

Saving money may seem difficult with high inflation, but consumers might be pay more on their monthly bills without even realizing it, Woroch said. Here are some ways consumers can save on their monthly expenses:

Rethink your mobile plan

Consumers might rethink their mobile data plans and downgrade to cheaper, lower-tier plans or look for carriers offering deals to buy services in bulk, such as $15 a month for calls, texts, and cellphones. data or just $30 a month for unlimited data, Woroch said. In some cases, she said repricing your cell phone plan could result in cost savings of over 50%.

“A study found that 90% of mobile users waste money on unnecessary unlimited data plans and you could save a lot by switching,” she said.

Increase your insurance deductible

The more you increase your insurance deductible, the more your monthly premium decreases. Raising your deductible might make sense if you can afford higher costs when making a claim. The move could help some consumers save up to 20% on their monthly premium, Woroch said.

Unplug unused appliances to save electricity

inflation and rising electricity prices and gas have increased the amount consumers spend on utilities. The latest consumer price index (CPI), a measure of inflation, showed that the electricity index rose 14.1% over the past year and the natural gas index increased by 20% over the same period, according to the Bureau of Labor Statistics (BLS). Consumers could save up to 10% on their electricity bills by unplug unused gadgets, said Woroch.

Another way to save on your monthly bills is to take out a debt consolidation loan to help pay off your existing debts at a lower interest rate. Visit Credible to compare debt consolidation loan options and find your personalized interest rate without affecting your credit score.

Do you have a financial question, but you don’t know who to contact? Email the Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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