Every January, it happens to many shoppers: You look at your bank or credit card statement and feel as if you’ve awakened to a financial hangover. You figure you must have blanked out for most of December, because there’s no way you would have spent so much if you had been thinking clearly. In fact, you are pretty sure you set aside a certain amount of money for gifts. So what happened?
The holidays happened, that’s what. It turns out, you probably aren’t just spending money on gifts. Actually, gifts may be the least of your worries.
According to the National Retail Federation’s Holiday Consumer Spending Survey, which polled 7,547 consumers in October, Americans will spend an average of $459.87 on gifts for their family this year. But there are a lot of hidden costs related to the holidays that you may be neglecting to factor into your monthly spending. If you want to avoid another crushing January hangover, here are some hidden costs to consider paring down.
Decorations. A Kmart and Sears survey of 1,000 adults in November indicated that 34 percent of Americans plan on spending $100 or more this year on holiday decorations. Even if you don’t spend that much, you’re probably going to buy something: According to the survey, 82 percent of Americans plan to buy new decorations.
Wrapping paper. According to research from Hallmark, Americans spend approximately $3.2 billion a year on wrapping paper. That presumably includes gift bags, which, according to Hallmark, are the No. 1 way consumers wrap gifts. In any case, the more gifts you buy, the more wrapping paper – or gift bags – you’ll likely use. Budget accordingly.
Food. According to the NRF survey, Americans will spend an average of $104.74 on holiday-related food, which could include everything from going out to restaurants with the family to buying a bottle of wine for a party. And, of course, this is just the average – you may end up spending far more.
Self-gifting. The NRF’s survey indicates that this year, 57 percent of consumers will buy gifts for that really special someone in their lives: themselves. Yes, odds are likely that you will buy a gift for yourself as you sift through the sales and shop for your loved ones. Nothing wrong with that, of course, but have you budgeted for it? According to the NRF, if you self-gift this year, you’ll spend an average of $126.68. Hopefully you’ll get yourself something good.
Gift cards. You might be thinking the only gift cards you’ll purchase will be factored into your gift budget, so no need to discuss these, but you should still take a special look at gift cards and how often you buy them.
You probably purchase a lot of gift cards. According to a gift card survey NRF conducted in November, polling 6,593 consumers, gift cards are the most-requested item on holiday wish lists for the eighth year in a row; Just over 60 percent of consumers surveyed said their most-preferred present is a gift card, and the average shopper will spend $172.74 on gift cards this year, according to the NRF.
Keep in mind that every time you buy a gift card for someone, you rob yourself of the chance to buy a thoughtful gift for a family member, friend or co-worker – and one you just might find on the clearance rack. You might have bought a $7 shirt for a nephew instead of giving him a $25 gift card to his favorite store. Sure, your nephew is worth it, but if you’re budgeting $200 for gift cards, you’ve locked yourself into that price – unless you purchase the gift card through a discount exchange like GiftCardRescue.com or MonsterGiftCard.com.
Source: U.S. News & World Report