Originally Published TD Bank.
This holiday season, millennials (ages 20-37) are most likely to create a spending plan, stick to it (76 percent) and pay off balances in full before the New Year (49 percent) according to TD Bank’s Merry Money Holiday Spending Survey.
TD Bank, America’s Most Convenient Bank, polled 1,000 U.S. consumers to better understand spending habits and money management around the holiday shopping season. The survey found that even though more than half of consumers (66 percent) typically create a holiday budget, 72 percent admit to overspending.
Does This Jingle a Bell
Nearly seven in ten (68 percent) of those who overspend blow their budget by as much as $300 during the seasonal shopping rush, with 63 percent blaming their surplus spending on impulse purchases. And some are starting the new year off with debit: of those who use credit cards to do their shopping, less than half (45 percent) pay their balance off by January.
“It’s always important to understand your budget especially during this time of year, when it’s so easy to overspend,” said Jason Thacker, Head of U.S. Consumer Deposits and Payments at TD Bank. “Remember the financial cost of the gift isn’t representative of the memory you’ll create or the sentiment behind it, so try to resist the urge to break your budget over those unplanned impulse purchases.”
Millennials Focus on Sleighing Debt
FOMO may be influencing millennial purchases of the coolest brands, experiences and trending gifts, as most millennials (63 percent) admit to overspending on family and friends. Three out of four millennials (75 percent) admit to overspending during holidays past, more than any other generation.
Spectrum of millennial overspending:
- 67 percent estimate they overspent by less than $300
- 25 percent estimate they overspent between $300 – $750
- 5 percent estimate they overspent over a whopping $750
However, millennials show more focus on managing debt and are more likely than their parents’ and grandparents’ generations to create a holiday budget (74 percent), stick to it (76 percent) and pay debts off in full (49 percent).
“Many millennials came into adulthood with high student loan debt, making them wearier of spending money they don’t have and giving them more incentive to make budgets in the first place.” said Lauren Greutman, a savings expert and founder of the personal finance site LaurenGreutman.com who reviewed the survey data.
The Gifts That Keep on Giving
While some grandparents appreciate homemade gifts, 43 percent of respondents in the 65+ age category put gift cards at the top of their most-wanted holiday gift list. They’re not alone: almost half (49 percent) of all Americans would prefer gift cards or cash to get something they really want, especially millennials (57 percent).
When it comes to regifting, GenXers (ages 38-53) take the (fruit)cake, with half admitting to the practice. However, all generations wish to minimize the chances of an unwanted gift, and more than half of shoppers (51 percent) give gift cards as presents. More than three out of four respondents (76 percent) reveal they give gift cards because it’s an easy and convenient way to give people something they really want or need.
TD Bank’s Merry Money Holiday Spending Survey uncovers how Americans budget and spend around the holiday season.