Spend or Save in 2023? Insights from Holiday Spending Statistics

December 4, 2023 |
Article | 5 min
| Personal Insights

Despite economic fluctuations over the past year, average Americans continue to spend during the holiday season. The latest statistics suggest that online sales are projected to grow by 4.8% year-over-year, reaching $221.8 billion this year.

Navigating the challenges of rising inflation and finding holiday joy can be complex. To navigate this, let’s analyze past and present holiday shopping patterns as a reference. Additionally, we’ll identify strategies to maximize your enjoyment during this festive season.

A Brief Look at Past Holiday Spending Statistics

The holiday spending statistics of recent years are linked to the exceptional circumstances brought about by the Covid-19 pandemic. This further complicates the already uncertain economic forecasts, creating a financial haze that obscures future predictions.

Simply put, consumers are confused about the present economic situation. This is partly due to the difficulty in deriving definitive conclusions from recent years. However, certain consistent spending patterns can provide valuable insights into prevalent consumer attitudes and behaviors. This may help you understand how interest rates might impact you. But even in tumultuous economic conditions, holiday spending can remain strong. Consumers are sometimes willing to sacrifice more by dipping into savings or using credit to cover rising costs. But will this trend continue?

Navigating the Impact of Recent Events

Recent holiday spending statistics project that this year’s expenditures will likely come close to the outcome in 2022 but fall slightly short by 2.5%.  People are spending money in new ways, which can lead to spikes in certain sectors such as eCommerce. But overall, the holiday shopping trends for 2023 are on a slight decline.

We’ve seen consumer priorities shift to experiential spending since the pandemic stopped life in its tracks for many people. Notably, this led to the Great Resignation and contributed to the spike in travel post-pandemic.

So, people may choose to forego material presents in favor of spending on travel, shows, or other experiences.

Crafting a Practical Budget

It would be preferable to refrain from using your savings or depending on your credit card during the holiday season. By doing so, you can exercise better control of your expenses and avoid negative financial consequences later.

To achieve this, you may want to start saving ahead of time. One approach is to allocate additional funds specifically for holiday-related expenses, such as vacations or gifts. By doing so, you know that you are utilizing funds from a separate account rather than depleting your regular bank account, thus avoiding the diversion of money intended for essential expenses.

It’s never too late to start this behavior. Simply set aside a small sum regularly, perhaps every pay period. You’ll be surprised how fast your savings can grow!

Savvy Shopping Strategies Based on Holiday Spending Statistics

Planning ahead is the key to being a financially savvy online shopper, especially in the age of digital retail.

Chances are, you’re most likely completing some of your shopping online. It’s wise to buy as early as possible to avoid rush shipping fees or encountering items that are out of stock.

Before making your purchases, conduct research on the costs involved. This will enable you to establish precise savings goals for your fund. Begin by creating a list of potential gift choices for each person and decide on your budget in advance.

Starting your shopping early and researching the best deals on your purchases is a good strategy even if you’re shopping in physical stores. Otherwise, you could risk overspending in the mad dash to complete your gift list.

Travel Rewards and Loyalty Programs

Gifting a vacation instead? Traveling for the holidays? Travel rewards and points may deliver deals, upgrades, or perks on flights, hotels, and related purchases.

There are a few easy ways you can possibly accumulate points to cut down on the cost of travel, such as:

  • Credit Cards: You may earn points through sign-up bonuses or purchases.
  • Loyalty Memberships: To accumulate miles or points, you can consistently use the services of specific airlines, hotel chains, and car rental companies.

You can leverage travel rewards to possibly cut the costs of travel this holiday season if you already have points. But even if you don’t, now is a great time to start accumulating rewards to save for next year.

Navigate Holiday Spending Statistics With a Professional

No matter what the statistics say, your personal financial situation is unique and will determine your holiday spending. Our team is ready to help you make the most of your holiday season spending with customized advice. We work with you to discuss budgeting strategies and financial tools to help ease your mind.

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