- Just one month before the start of the holiday season, 60% of adults said they are living paycheck to paycheck, according to a new LendingClub report.
- Yet consumers still plan to overspend during the holidays, other reports show.
- We’re in a time of “hyperconsumption,” says Jacqueline Howard, head of money wellness at Ally Bank.
The LendingClub report was conducted in October, just a month before the holiday season gets into full swing.
This year, holiday spending could reach a record high during Thanksgiving week as consumers look to maximize the weekend’s deals, according to a 2023 Deloitte Black Friday and Cyber Monday survey. Deloitte found that the Spending during the week is expected to rise 13% compared to last year, with shoppers spending an average of $567.
Barbie dolls (R) are on sale at a Walmart Supercenter in Burbank, California, ahead of Black Friday on November 14, 2023.
Mario Tama | Getty Images News | Getty Images
Despite credit card debt topping $1 trillion, nearly all – or 96% – of shoppers said they expect to overspend this season, according to a separate survey from TD Bank.
According to another report from Ally Bank, half of consumers plan to take on more debt to pay for vacation expenses. Only 23% plan to pay off the amount within one to two months.
According to a separate CNBC Your Money Financial Confidence Survey conducted in August, about 74% of Americans say they are stressed about their finances. Inflation, rising interest rates and lack of savings contribute to these feelings.
That CNBC poll found that 61% of Americans are living paycheck to paycheck, up from 58% in March.
Many households have tapped their cash reserves in recent months, LendingClub and other reports show. According to LendingClub, more than a third of consumers plan to dip further into their savings to cover holiday expenses.
“While consumers have found a way to cope with inflation, it is worrying that many are planning to dip into savings and even go over their budget to fund their Christmas shopping, which could leave them vulnerable to an unexpected emergency,” said Alia Dudum from LendingClub’s Money Expert.
Consumers are increasingly adopting a “hyper-consumption mentality,” said Jacqueline Howard, head of money wellness at Ally. This is especially true during the holidays, when families typically overspend on gifts.
“Hyperconsumption comes from a lack of mindfulness,” she added. “Think about what makes the most sense for your well-being.”
Howard recommends a values-based budgeting approach when it comes to budgeting for holiday shopping — “If your priorities are family, travel or other experiences, let that guide your spending,” she said.
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