Even though it’s been a chaotic year, most Americans are still planning to celebrate the holiday season. There is one major difference from last year’s celebrations, though.
U.S. News & World Report ran a survey from Oct. 29 to Nov. 3 and asked consumers if their financial plans for the holidays had changed from last year’s plans. More than 33% of survey respondents say they would be spending less than they did in 2019 due to the impact of the pandemic.
Here’s a closer look at consumers’ holiday spending plans for 2020.
How Much Are Consumers Planning to Spend?
Almost 52% plan to spend less than $499 on gifts, food and drink, travel costs, and decorations. This is an increase from 2019, when 48% of consumers were planning to spend less than that amount on the same expenses.
— About 21% plan to spend between $500 and $999.
— More than 10%, which is down about 1.5 percentage points from 2019, will spend between $1,000 and $1,499.
— Almost 6% will spend between $1,500 and $1,999.
— Around 3% plan to spend between $2,000 to $2,499.
— Just less than 2% plan to spend between $2,500 to $2,999.
— Almost 7% plan to spend $3,000 or more.
[Read: Best Rewards Credit Cards.]
Are Consumers Financially Prepared for Holiday Spending?
When it comes to finances, there’s good news and bad news. The good news is that almost 35% of respondents had saved all the money they needed to pay for the holidays. And 24% had at least started to save money for holiday expenses.
But here’s the bad news: More than 41% of survey respondents had no money saved for the holidays this year. This is only slightly more than last year’s results. In 2019, 40% had not saved any money to pay for the holidays.
When asked how they plan to prepare for holiday shopping expenses, there are some smart strategies selected:
— A little less than 31% plan to use a shopping list to stay on budget.
— Right at 28% will have a budget for the holidays.
— Almost 26% plan to compare prices and sales.
— More than 8% plan to earn extra money to pay for expenses.
I recommend using all of these strategies, even if you have money saved. Why not save more? And if you’re really hurting financially due to the pandemic, take note that more than 8% plan to earn extra money. Keep that in mind because there are many businesses that will hire seasonal help.
[Read: Best Cash Back Credit Cards.]
Are Consumers Using Credit Cards for Holiday Shopping?
In the 2019 survey, more than 33% of consumers said they would use a credit card to pay for holiday shopping. In this year’s survey, exactly 35% say they would use a credit card.
It makes sense that credit card usage would increase for the 2020 holidays, since about 36% plan to shop online at major retailers, like Amazon. This is an increase over 2019, when around 33% of consumers planned to shop online. Given the pandemic and fears of crowded public places, it’s not surprising that online shopping is even more popular this season.
Here are more findings about shopping choices in 2020:
— Right at 16% plan to shop at small businesses.
— Around 9% plan to shop at small online businesses.
— Almost 8% plan to shop at brick-and-mortar stores, such as Macy’s.
If you do use credit cards this season, try to pay the balance in full by the due date. The survey shows that 39% of card users aren’t going to carry a balance on credit cards, which is terrific. Less than 7% say they’ll carry a balance, but more than 14% say they aren’t sure if they would carry a balance or pay it off by the due date.
How to Find Quick Cash This Holiday Season
Unless you’re going to inherit a fortune during the next month, you’ll have to put in some time and effort to make ends meet. I know you can do it!
Let’s take a look at four ways to survive holiday expenses:
— Get a temporary side hustle.
>Use credit card rewards.
In the survey, only about 25% plan to redeem credit card rewards to help reduce holiday expenses. If you’re using rewards credit cards, check your rewards balance. You might have enough rewards to redeem them for gift cards or merchandise. Or if it’s an option, you can get a statement credit and help pay for your purchases that way.
Also, find out if your credit card issuer has an online shopping portal. You can often get deep discounts from these online malls. Only 2% of survey respondents plan to shop on online portals. Many credit cards offer shopping portals, including airline-branded cards.
Don’t forget about Amazon’s Shop with Points program. If your credit card is included in the program, you can redeem rewards while shopping on Amazon. But I warn you to read the fine print. There are some credit card rewards that have a lower value when used this way.
Use a 0% APR credit card.
This is a great strategy if your cash flow dilemma is a short-term issue. You can get a credit card with an introductory 0% purchase annual percentage rate. This means you can put holiday purchases on the credit card and pay the balance off monthly over the course of a year or more.
And guess what? During the intro period, which usually ranges from 12 to 18 months, you don’t pay any interest. Like I said, if you’re expecting relief soon, this is an excellent way to get an interest-free loan.
[Read: Best 0% APR Credit Cards.]
Get a temporary side hustle.
The holidays are prime time for temporary jobs. I know it’s tough if you’re avoiding going into stores, but there are plenty of stay-at-home opportunities, such as being a COVID-19 contact tracer or taking surveys online. If you don’t mind minimal contact with others, deliver food for DoorDash or Uber Eats.
If you’re looking to build a new income stream beyond the holidays, ask yourself one question: What’s my superpower?
Everyone has a set of marketable skills. For example, if you’re an excellent writer, explore doing some freelance editing or writing. Or check out opportunities to sell your products or services on platforms like Fiverr, eBay or Etsy.
Ask for cash gifts.
This is the easiest strategy of all. You most likely know who will be buying you a holiday gift. Be bold and ask for a cash gift.
Bonus tip: Be sure you tell the person how much you’ve loved their gifts in the past so they don’t think this means you’ve hated all of their holiday presents!
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Survey: A Third of Consumers Plan to Spend Less This Holiday Season originally appeared on usnews.com
