From decorations to greeting cards, from holiday meals to cookies and treats, the end of the year also brought the season where we not only spent time with family, we also spent a whole bunch of money.
IBIS World estimated that overall holiday spending increased by 0.9% to the tune of $73 billion (B) dollars. Those billions roughly break down to $8B spent on electronics, $5B on jewelry and accessories, $6B on gift cards, and $10B on clothing. About $6.7B was spent on food during the holiday season and $7.2B was spent on decorations. The only area to see a decrease last year was cards and postage (thanks to Facebook, Instagram, and the Wi-Fi connected digital photo frame we gave Grandma for Christmas last year).
The even more surprising fact according to a recent survey we completed at MX is that 58% of consumers put their holiday spending on credit cards,while 63% had no plan for holiday spending. This leads to more than $49 billion in end of year spending that was not budgeted and a much higher credit card balance. Take into account that 62% of Americans can’t cover an unexpected expense and you’ve got a snowball effect of debt that piled up on Americans. That's a hard way to start a new year!
There’s of course light at the end of the tunnel. As you can see in the infographic above, 20% of consumers are using a budgeting app of some kind, and 3 of every 4 users are depending on their financial institution for that tool. This highly increases the likelihood that those users will be prepared for their 2016 holiday spending and will therefore enjoy a guilt free January 2017. :)