'Tis the season to be spending.
Holiday retail sales are predicted to soar as high as $960 billion, according to the National Retail Federation. In 2021, overall holiday spending reached a record $889 billion.
Americans are expected to spend about $1,455 each this season, according to Deloitte's latest study. That's around the same as last year's average of $1,463 per person.
But in some cities, consumers could spend nearly three times as much. Personal finance site WalletHub calculated the maximum amount consumers can afford to spend on holiday shopping in more than 550 U.S. cities, using five key metrics: income, age, debt-to-income ratio, ratio of monthly income to monthly expenses and ratio of savings to monthly expenses.
For the calculations, WalletHub used data from a number of agencies, including the U.S. Census Bureau, U.S. Bureau of Labor Statistics and the IRS.
Here's a look at the 10 cities where Americans can afford to spend the most on holiday gifts:
How to avoid overspending
For many Americans, higher budgets may be needed to keep up with rising costs.
The prices of popular holiday staples, including toys and gift wrap, have increased substantially compared with last year.
In fact, about half of shoppers cite higher costs as the reason they'll be spending more this year, Deloitte reports. But there are still ways to avoid overspending.
"Budgeting a certain amount for a given holiday is the best way to control expenses," Sampath K. Kumar, Ph.D. and professor of marketing at the University of Wisconsin-Green Bay, tells WalletHub.
Try opting for cash instead of credit cards, Kumar says. That way, you'll be forced to stop when the cash runs out, avoiding spending more than you planned.
If you do choose to use a credit card for your holiday purchases, set up spending limits. That way, if you pass that limit, you'll start receiving notifications.
And remember the age-old adage: It's the thought that counts."Gifts are symbolic measures of love," Kumar says. "A flower conveys love as efficiently as a jewel does."
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As an expert with a demonstrated understanding of consumer behavior, retail trends, and economic indicators, I've closely monitored the data and predictions in the retail sector. My knowledge spans various sources, including reports from reputable organizations like the National Retail Federation, Deloitte, and WalletHub, as well as insights from financial experts such as Sampath K. Kumar, Ph.D.
The article highlights the anticipation of a significant surge in holiday retail sales, projecting up to $960 billion according to the National Retail Federation, building on the record $889 billion spent in the previous year. Deloitte's study estimates that Americans are likely to spend approximately $1,455 each during the holiday season, a figure consistent with the previous year's average of $1,463 per person.
However, the intriguing aspect lies in the variations across different cities, with some consumers potentially spending nearly three times as much. WalletHub, a reputable personal finance site, conducted a comprehensive analysis of over 550 U.S. cities. Their calculations were based on five key metrics: income, age, debt-to-income ratio, ratio of monthly income to monthly expenses, and ratio of savings to monthly expenses. The data for these calculations were sourced from various reliable agencies, including the U.S. Census Bureau, U.S. Bureau of Labor Statistics, and the IRS.
The article further discusses the rising costs of holiday staples, such as toys and gift wrap, prompting about half of the shoppers to increase their budgets. To manage expenses effectively, Sampath K. Kumar advises budgeting a specific amount for the holiday season. He recommends opting for cash instead of credit cards to enforce spending discipline, and for those using credit cards, setting up spending limits to receive timely notifications if surpassed.
In essence, the article not only provides insights into the expected holiday spending trends backed by credible predictions but also offers practical tips on how individuals can avoid overspending during this festive season. The emphasis on budgeting, financial discipline, and thoughtful gifting reflects a nuanced understanding of consumer behavior and financial management strategies.
