(NewsNation) — ‘Tis the season of spending and according to a new survey nearly a third of holiday gift-givers expect to go into debt this year.
A LendingTree survey of nearly 2,050 U.S. consumers found that 30% of those who plan to give gifts this year are prepared to break their budgets and go into debt.
Meanwhile, nearly half (47%) said they’ve gone into debt due to holiday spending in the past.
“Debt has become one of those things that people dread about the holidays, along with travel nightmares and awkward family conversations,” Matt Schultz, LendingTree’s chief credit analyst, said in the report.
Among those who have gone into debt due to gift-giving, 46% blamed inflation and the rising costs of presents. This year, almost a third of Americans are opting out of gift-giving altogether, with most citing cost as the reason, LendingTree found.
Another sign of the times: Cash is the top gift preference, followed by gift cards, experiences and clothes.
Of the gift-givers surveyed, roughly 40% said they would trade all their gifts for the equivalent cash value if they could.
The survey’s findings underscore the financial stress many Americans are feeling after a period of rampant inflation. While price hikes have eased, many have noticed that what goes up, doesn’t always come down.
Nevertheless, the National Retail Federation expects holiday spending to hit a record $902 per person this year. And most shoppers (74%) plan to use credit cards, according to NerdWallet.
A separate CreditKarma report found that about a third of consumers are heading into the shopping season with more than $5,000 in debt.
How to avoid overspending during the holidays
Holiday shopping surveys show a consistent trend: Americans feel pressure to spend big on their loved ones.
Schultz thinks communication is key to reducing that stress.
“If you’re struggling financially and need to dial back the gift-giving this holiday season, tell people,” he said. “Most of your loved ones don’t want you to go into debt for a holiday party or gift, so they’ll understand.”
Elizabeth Ayoola, a personal finance expert at NerdWallet, agreed that a transparent conversation can go a long way, even if it’s with yourself.
“It’s important to remember that you are not a failure because you cannot afford to buy expensive gifts,” she told NewsNation in a recent interview.
LendingTree’s survey found that most Americans (63%) who’ve gone into debt for holiday gifts have regretted it.
These are five steps you can take to avoid overspending this holiday season:
- Set a budget (and expectations)
- Look at what you spent last year and set a spending limit based on your current situation. Then, be clear with your loved ones.
- Avoid “spaving” this holiday season
- Be careful of deals that require you to spend more to save more. Is free shipping worth it if you have to spend $100?
- Consider paying with cash
- It’s never been easier to spend money but research shows it hurts more to pay with cash. That pain can push you to spend less.
- Take a break from social media
- Targeted ads can wear you down and cause you to buy things you don’t need. Consider logging off Instagram and Facebook for a while to avoid the temptation.
- Create shopping hurdles
- Make it harder to spend money. Remove credit card details from your web browser to add an extra obstacle and cut back on impulse spending.
