As the global economy struggles to recover from the pandemic’s devastating effects, countries around the world have been facing a prolonged period of soaring inflation. This has resulted in price increases that are far higher than the pace of the average wage growth, leaving consumers with financial uncertainty and less purchasing power.

To find out how Americans are feeling about this year’s holiday shopping amidst the rising costs, leading debt resolution agency Beyond Finance and survey platform Pollfish asked US adults to share their opinions and holiday spending plans. Here are some of the key findings from the Beyond Finance 2022 Holiday Financial Stress Survey.

Respondent snapshot

A total of 1,081 adult consumers with an annual household income of more than $25,000 participated in this survey. Although this minimum household income is considerably low, the majority (68%) of respondents had an annual household income of over $50,000, with 27% of respondents earning over $100,000 a year across the household.

Most of the respondents (78%) currently have credit card debt, with 43% owing more than $5,000 on their credit cards and 21% of respondents owing over $10,000. Nonetheless, 86% of people surveyed indicated that they planned to spend at least $250 on holiday shopping this year. Notably, 23% of respondents planned to spend over $1,000.

Concerns about holiday shopping

One key finding from the survey was that Americans are worried about inflation making it difficult for them to afford holiday shopping this year. Participants were asked how concerned they were about being able to pay for holiday gifts. More than half (57%) indicated that they were much more or somewhat more concerned, while 33% were as concerned as last year.

In response to financial considerations, four out of five participants had adjusted their holiday expenditure expectations. 53% of respondents planned to buy fewer or less expensive gifts while 21% did their holiday shopping early in anticipation of rising costs. Instead of buying less, some respondents (23%) planned to bite the bullet and just pay more for gifts.

Despite differences in the way respondents chose to deal with holiday shopping, the vast majority (81%) of them indicated that they would reduce their spending to keep their holiday expenses in check. This included making an effort to spend less on eating out (44%), buying gifts (39%), traveling (37%), and contributing to celebrations and events (30%).

Less cash, more credit, more worries?

Another key finding from the survey was that half of the respondents planned to pay for their purchases with credit cards. According to 41% of respondents, this is because they have less cash and savings available for shopping this year. Other methods of payment aside from cash include “buy now, pay later” offers (6%) and loans/cash advances (1%).

A troubling trend found from the survey was that consumers who had the greatest credit card debt were often also the ones who planned to spend the most. More than a third (35%) of respondents with over $10,000 in credit card debt planned to spend more than $1,000 on gifts. In comparison, only 11% of respondents with no debt planned to spend the same amount.

The survey found that this need to spend during the holidays was largely a result of the expectations of family and friends. Respondents are expected to pay for or host holiday events, purchase expensive gifts, or fund travel expenses. When asked if holiday shopping was causing financial health worries, half of the respondents said yes.

How shopping ruined Christmas

One finding of interest was that men between 35 and 44 were most likely to be heavily in credit card debt. 58% of men in this age range owed over $5,000 on their credit cards, compared to the 43% survey average. In addition, 42% of all male respondents with credit card debt expressed fears that the costs associated with holiday shopping would ruin their holiday.

This finding echoes the concerns of an earlier Beyond Finance Mental Health Awareness Month survey. That survey found that people suffering from acute financial stress reported negative mental health impacts with 67% of respondents engaging in “stress shopping”, 58% feeling alone in their financial stress, and 51% ashamed of their financial struggles.

With the holiday season approaching slowly but steadily, the associated expenditure is expected to create serious concerns for many families. These surveys make it clear that financial literacy and the ability to manage debt are important if we want to prevent consumers from accumulating debt and experiencing the negative effects of acute financial stress.

About Beyond Finance

Beyond Finance is a dynamic and innovative financial services firm. The firm’s mission is to help people get out of debt and feel secure about their financial future by offering straightforward options for managing money. One of the largest and most respected debt management agencies in the country, Beyond Finance has offices in Chicago, Houston, and San Diego.

Beyond Finance is empowered by cutting-edge technology to provide tailored debt reduction programs that are both effective and fair. The company provides free consultations by high-qualified financial consultants to create step-by-step plans for their clients, allowing consumers to move beyond debt and gain control of their finances.

For more information, visit their website at beyondfinance.com.