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Survey shows Americans are willing to splurge on holiday shopping

It’s the most amazingly expensive time of the year and people are expecting to spend big.

A new survey from MassMutual shows that consumers are feeling optimistic about their finances – and are planning to spend an average of $1,243 on holiday-related purchases this season. For comparison, The national median rent is $1,312 in October, according to a report from Apartment List.

NS Consumer spending & savings index surveyed 1,000 US adults online between October 18 and October 22, 2021.

The survey shows that although record high inflation, 73% of Americans said they feel optimistic about their finances. 35% said they feel “very optimistic” about their finances, up from 27% in July and 21% in February.

“Inflation is likely to hit some other groups harder – such as retirees, people on fixed incomes and lower-income households. That said, I feel that more people have more discretionary cash and feel more confident, despite rising inflation,” said Paul LaPiana, a certified financial planner and head head of product at MassMutual, told MarketWatch by email.

Most Americans have been able to save money during the pandemic, and therefore have cash to spend now. MassMutual found that 35% of respondents have saved more than $1,000 in the past three months.

Retail sales already last month increased by 1.7%, NS US Census Bureau said on Tuesday. And the National Retail Federation has forecast record high spending this holiday season – with November and December sales expected to reach between $843.4 billion and $859 billion.

MassMutual found that 42% of US adults plan to spend at least $500 more this holiday season than in 2020, and a quarter expect to spend at least $1,000 more in this year.

Similarly, Deloitte’s latest holiday retail survey predicts that households will spend an average of $1,463 this holiday season, up 5% from last year. The Deloitte report notes that nearly all of the profits will come from high-income households. “[T]This is a story of two holidays, with higher income households planning to spend 5 times more than lower income households,” said the Deloitte report.

According to a survey by MassMutual, while nearly half plan to use the money they have set aside for vacation spending, the increase in spending could leave some people worse off in debt. Among those who plan to use a credit card to pay for their vacation, 59% say they won’t be able to pay off their vacation debt for at least six months.

13% of consumers are still paying off the holiday debt they paid last year, a LendingTree survey found, and 41% expect to pay off debt this holiday season.

And while most people did holiday shopping online last year due to the pandemic, 29% said they would shop in-store this year. More than a quarter of consumers said they would shop in person to avoid delivery delays.

People also expect to spend more on travel expenses on vacation (34%), attend and celebrate holiday celebrations in person (34%) and “big ticket experiences”, such as performances, concerts or sporting events (23%).

While rising spending heralds a continued economic recovery, consumer sentiment has lowest level in a decade in November when inflation expectations hit a 13-year high.

Overall, however, people are feeling more optimistic, LaPiana said, which suggests we should see continued momentum in the economy.

See more: Nearly 1 million jobs are complicating an already challenging holiday season for retailers

https://www.marketwatch.com/story/americans-are-optimistic-about-their-finances-and-plan-to-splurge-this-holiday-season-survey-finds-11637082092?rss=1&siteid=rss | Survey shows Americans are willing to splurge on holiday shopping

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