Besides bringing good cheer, the holidays also can invite seasonal stress, a primary source of which experts at the District-based personal finance website WalletHub said is America’s addiction to spending.
WalletHub reported that the National Retail Federation has predicted that 2019 holiday spending will increase by about 4 percent over 2018, with a total of over $727 billion to $730 billion in retail sales. That total excludes car dealers, gas and restaurants.
WalletHub said while spending a little extra around the holidays might seem negligible, it’s important to put it in the context of American spending, and credit card debt, as a whole.
In 2019, the average household credit card debt is $8,602, according to WalletHub’s data. At the beginning of the year, there was over $1 trillion in total credit card debt, and WalletHub projects a $70 billion net increase this year.
Researchers at WalletHub calculated the maximum holiday budget for each of 570 U.S. cities using five key characteristics of the population, such as income, age and monthly savings-to-expenses ratio.
With an average holiday budget of $3,160, Palo Alto, California, ranked No. 1 for budgets this year.
Sunnyvale, California ($2,971); Flower Mound, Texas ($2,937); Newton, Massachusetts ($2,888); and Mountain View, California ($2,877), rounded out the top five.
With an average holiday budget of $792, the District ranked 209 out of the 570 cities in the survey.
Other nearby cities included Rockville, Maryland (ranked 19th at $2,170); Arlington, Virginia (27th, $1,927); Alexandria, Virginia (42nd, $1,601); Columbia, Maryland (45th, $1,573); Silver Spring, Maryland (89th, $1,189); Germantown, Maryland (169th, $900); Waldorf, Maryland (182nd, $856); and Frederick, Maryland (254th, $721).
“To avoid overspending during the holidays have a realistic budget and plan with a maximum cap that you share with a spending partner, do not be guilted — by yourself or others — into overspending, and shop year-round/early to get both the best prices and the greatest number of options,” said WalletHub expert K. Scott Swan, the head professor of Innovation and Marketing, and a 2015-16 Fulbright and Hall Distinguished Chair for Entrepreneurship at the College of William & Mary.
“I have eight children, and this is the only way I survive,” Swan said.
It’s important not to underestimate budgeting, said Kristofer Chang Alexander, a WalletHub expert and clinical assistant professor of consumer science and the School of Hospitality and Tourism Management at Purdue University.
“This probably gets said a lot but make yourself a budget of how much you want to spend per person,” Alexander said. “Taking into account family members, friends, co-workers and acquaintances. Use one of those special debit cards that allow you so much to spend and once it’s at zero dollars you know you’re done.”
Asked where should people draw the line in determining who to purchase a gift for, Alexander said that it’s important to create a diagram, chart, or list and put those that are closest to you at the top and those that are acquaintances at the bottom.
“And then determine from there whether you have the means to purchase gifts for those towards the bottom,” Alexander said. “At the end of the day, you can be creative with gift-giving and don’t have to spend a ton of money. Even a thoughtfully written card to those that are acquaintances can really make their day. Just this small of a gesture can raise someone’s overall well-being.”