More feeling pressure to overspend and financial stress this holiday season
Published 12:10 am Saturday, December 5, 2015
By Amanda Raymond
A recent survey found that more Americans are feeling the pressure to spend beyond their means and expect more financial stress this holiday season.
According to a SunTrust Bank, Inc. survey conducted by Harris Poll in October, 46 percent of Americans felt pressure to spend more than they can afford this year, compared to 39 percent last year. For parents with a child under the age of 18, 61 percent felt pressure to overspend this year compared to 53 percent last year.
The survey also found that 29 percent of Americans expected this holiday shopping season to be more financially stressful than last year, compared to 24 percent who thought so last year.
“If you are feeling stressed, you are not alone. Rising credit card balances, overdrawn accounts and limited time to spend with family are a few of the top holiday stressors clients tell us about,” Brad Dinsmore, head of Consumer Banking at SunTrust, said in a press release.
Stacy Newton, executive vice president, North and South Carolina Branch Banking Division executive at SunTrust, said the pressure to equate the amount of dollars spent with holiday memories causes some of the financial stress.
She said holiday media campaigns encourage the line of thinking that spending more money during the holiday will make the season better or more memorable.
“You don’t often see a media image of ‘I’m not going to spend my dollars on the newest thing because I’m going to save my money for my kid’s college fund,’” she said.
The survey found that the millennial age group, 18-34, had the most people with expected financial stress with 42 percent reporting more expected financial stress this holiday season. That’s an increase from 29 percent last year.
Newton said many millennials are at a time in their lives when they are making big purchases, such as payments related to apartments, furniture, cars and insurance. They also may have children they need to provide for. All those things coupled with the holiday season may be what is causing the financial stress.
Newton said it is important for shoppers to remember that the amount of money spent during the holidays is not the most important thing.
“Really think about the experience of the season rather than the dollar amount of the season,” she said.
Michael J. Wright, CFP and financial adviser for Ameriprise Financial Services, said he sees the pressure to overspend differently.
“I perceive it as there’s more of an opportunity for more spending because they’re not spending as much at the pump,” he said.
When Wright asked his clients if they were going to spend more this holiday season, most said yes because of two reasons: they are making more money and they’re spending less of the money they are earning on things like gas.
Wright said not only do people feel more comfortable spending money on things like eating out and going to the movies, but they will save their money and spend more during the holiday season because of all the sales and deals that occur during this time of year.
“So I think we might see a seasonal adjustment upward in holiday spending,” he said.
Newton and SunTrust suggested the following tips to decrease stress this holiday season:
- Make a plan – Newton said it is best to go into the holiday season with a budget in place. She said to set limits and shop for sales.
- Use cash rewards – “I can’t tell you the amount of clients that are surprised at how much in rewards they have on their SunTrust card,” Newton said. The holiday season is one of the best times to cash those rewards in.
- Take advantage of mobile apps – Shoppers can quickly check their balances on their phones and set up text alerts to warn them when their balance is low.
- Set up overdraft protection – Linking a checking account to a savings account, credit card or line of credit can help shoppers avoid getting their card declined or paying additional fees.
For Wright, he said the best thing to do is to set goals.
“Set goals and priorities and stick to them,” he said. “Don’t spend money before you have it.”
Contact reporter Amanda Raymond at 704-797-4222.