The holidays are a time for giving and receiving, but this year, many people will be giving less than they normally do.
Anticipated spending on Christmas gifts is the lowest it has been in four years, according to a recent Gallup poll. Shoppers in the United States surveyed last month reported that they expect to spend an average of $805 total on gifts this year. In 2019, shoppers spent roughly $942, and at least 28% of this year’s shoppers say that they plan to spend less than they did last Christmas.
Although Christmas sales typically increase each year by an average of about 2% to 5%, according to the National Retail Federation, this year’s drop shouldn’t come as a surprise. Many people are cutting back financially because of the coronavirus pandemic, and others have ruled out holiday plans altogether due to concerns about the virus’s spread. As a result, fewer people plan to take advantage of in-person holiday sales (such as Black Friday, which attracts hundreds of thousands of shoppers each year), and those who do will spend less.
It’s a self-perpetuating problem with no easy solution. Decreased sales amid the pandemic have resulted in widespread layoffs across the retail industry that have, in turn, led to less spending and on and on.
The principle of spending less, however, isn’t necessarily a bad one, according to economists. One expert has been arguing for years that people should stop spending money on unnecessary holiday gifts for others because “we value items we receive as gifts 20% less, per dollar spent, than items we buy for ourselves.”
Perhaps that’s a “bah, humbug” way to think about gift-giving, but this year, it might just be necessary. Besides, there are plenty of worthwhile gifts that don’t need to be purchased, such as time spent with loved ones (virus-permitting), experiences shared together, and meaningful acts of service that speak for themselves.
So, if you, like many other people, find yourself in a financially precarious situation this Christmas, don’t fret. Creativity is on your side.
