Vacation spending will leave half of Americans in debt this year, survey finds

Inflation and stress also lead to anxiety and depression as families worry about overspending.

If you have to go into debt, really try to keep it under control. And when considering buying gifts, remember: it really is the thought that counts.

— Lawrence White, Professor, NYU Stern School of Business

AUSTIN, TEXAS, USA, November 15, 2022 / — Holiday spending is expected to be robust again this year, whether or not Americans can afford it.

Around 50% of shoppers plan to take on new short-term debt this year during the Christmas season to cover extra costs, and going through the season is damaging emotional health, causing depression, crying, compulsive overspending and even suicidal thoughts. .

And just like the Nov. 8 election, there’s a very narrow margin between the number of people who say they’ll spend more because they’re optimistic after the primaries — 7.58% — versus 6.21% who say they will spend less because the outcome has made them more pessimistic.

The National Retail Federation predicts holiday retail sales in November and December will rise 6% to 8% from a year ago, to between $942.6 billion and $960.4 billion. And that’s after last year’s $889.3 billion broke previous records. But many families are already struggling with inflation, rising gas prices and day-to-day expenses. Extra costs associated with gifts, travel and special meals are expected to blow budgets in the United States

How hard will families have it? surveyed 1,100 Americans to learn more about their holiday spending plans this year. Here are the results :

Americans will end the year in debt: While most said they would turn to a credit card to help them get through it, a third of those credit card users said they wouldn’t. able to pay the bill and that they’ll have to carry a balance through 2023. 13% plan to use “Buy Now, Pay Later” plans, which require paying for an item in four (or sometimes more) installments. Another 8% plan to use payday loans or title loans, and 7% will use personal loans. Nearly 9% will receive an advance of one salary advance app like Dave or an employer-sponsored earned salary app like PayActiv. About 3% said they plan to skip an essential bill to have extra money to spend while on vacation.

Under pressure: The most wonderful time of the year brings a lot of stress, anxiety and depression. Just under half of Americans experience some form of anxiety during the approaching season.

Wreak havoc: For those suffering from anxiety or depression, the emotional toll is so extreme that 7% say they have thought about suicide or questioned their will to live. About 53% cite constant worrying, 31% can’t sleep, 31% have cried because of holiday stress, 24% have mood swings, 23% overeat, 23% have bought stress-related items they cannot afford and 12% have consumed alcohol. About 15% plan to turn to a lender for help or financial advice.

Read the full report at:

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Feel free to embed any of the visuals included in the report on your website, or use or modify the raw files as needed. Complete datasets are available upon request.

Expert advice

What advice would you give to someone considering going into debt from holiday spending?

People need to consider both finances and psychology when considering the possibility of going into debt due to vacation expenses. Both elements are important. Financially, people often wonder how much they want to spend, how deep the debt will be created, what is the interest rate and how long will it take to pay it back. There are also psychological issues at play. These may include, “What does the gift recipient really need to know that I care about them or to make them happy?” ; “How much is really enough?” or “Apart from generosity, are there other emotions at play that influence my gift choices?” Sometimes we realize that this emotional side of spending, even if it’s buying for others, it’s more complicated than you first think.Taking a few moments to think about these psychological aspects can influence the extent to which people take on debt.
–Steven Meyers, professor in the Department of Psychology at Roosevelt University

Going into debt from vacation expenses has major downsides to your mental health. Our finances can play a major role in impacting our stress levels. When people spend more than they have or go into debt, their stress multiplies. Financial stress often increases conflict in family relationships, due to the expenses themselves when the partners disagree or due to the sacrifices needed to try to pay off the debt. Think carefully about the burdens of taking on holiday debt, as they could outweigh any possible benefits.
–Maryam Kia-Keating, associate professor of clinical psychology at the University of California, Santa Barbara, Department of Counseling, Clinical and School Psychology

There are many logical reasons to accept debt into your life. I think the best reason is to improve your economic situation. Accept debt if you are starting a business or going to college to earn a degree or certificate that will lead to promotion and increased income. Holiday expenses, it’s not worth it. Find a way to stick to your budget and plan for it throughout the year.
–Deborah Cohn, Acting Dean, School of Management, New York Institute of Technology

Jake Hill
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