‘Tis the season to overspend – or is it? There is still time to make a holiday budget and stick to it, even with rising prices. Consumers are expected to spend 7% more in 2024 than they did in 2023, according to BofA Securities‘ holiday spending forecast. Here’s a look at the numbers to see what the average holiday spending looks like in the U.S.
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What’s the Average Anticipated Spending?
The BofA Securities’ holiday spending forecast predicts that consumers will spend $2,100 on the holidays this year. However, there are conflicting numbers. Deloitte predicts the average spend to be lower – around $1,778. The National Retail Federation reported spending to be even lower at $902 on average per consumer.
This puts the range at anywhere between $900 and $2,100 for total holiday spending.
How Much Do Americans Think They’re Going to Spend?
There is a bit of a disconnect between predictions from retail and banking corporations versus the consumers themselves. According to TransUnion’s Consumer Pulse Study, most Americans do not see themselves spending more than $500 on the holidays. Only 28% of those surveyed said they planned to spend over $500, compared with 56% who said they were planning to spend over $250.
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Who is Spending the Most?
When it comes to holiday shopping, spending is not consistent among the generations. According to TransUnion’s Consumer Pulse Study, 63% of Millennials plan to spend the same or more on holiday shopping as did last year. This was the biggest share of a generation to respond this way. That’s probably due to 65% of Millennials being optimistic about their household finances, compared with 58% total for the entire population.
That being said, more than half (57%) of Americans planned to spend the same or more on holiday shopping this season compared to last year. Only 38% planned to spend less.
How Are Purchases Being Made?
When it comes to how people are buying things, TransUnion’s Consumer Pulse Study reports that credit cards are king. The study showed that 38% of holiday purchases are made with credit cards, 31% are made with debit cards, 16% are made with cash, 7% are made with mobile payment apps and 4% are made with Buy Now Pay Later plans.
Are You Over Budget?
At the end of the day, a budget is dependent on personal finances. If there is enough money to spend more than $2,000 on the holidays this year comfortably, then it doesn’t necessarily mean the budget is flawed. It would just be higher than the national average.
It’s also important to note from the research that consumers tend to underestimate how much they’ll spend. One way to combat this is to go shopping with a plan of who to buy for and how much to spend. This can keep budgets on track so there are no surprises on upcoming bank statements. Consumers can also consider bucking the trend and using debit cards and cash to pay for items instead of credit cards so there is no chance of spending money they don’t have.
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This article originally appeared on GOBankingRates.com: Here’s The Average Amount Americans Spend on the Holidays — Are You Over or Under Budget?
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