More than Half of Americans Admit to Making Poor Financial Decisions this Holiday Season

Staff Report

Thursday, December 14th, 2017

When it comes to holiday spending, Americans are willing to go to some extremes to afford gifts – even if they don't have the means. More than half (57 percent) expect to take on some form of debt to provide gifts for friends and family.

The COUNTRY Financial Security Index surveyed Americans just weeks before the holiday season to see how financially secure they feel going into the busy shopping season. The results show many Americans are overspending, digging into their savings and racking up credit card bills as a result.

"We're seeing Americans reach into their various savings accounts each year to offset the increase in spending during the holidays," says Doyle Williams, an executive vice president at COUNTRY Financial. "Holiday spending can be overwhelming but it doesn't have to be. By taking some simple steps to better manage finances and savings throughout the year, Americans can make holiday purchases without forgoing savings or acquiring unwanted debt."

Forgoing Savings to Afford Holiday Spending

More Americans are forgoing savings and placing financial security on the back burner this holiday season. One in five (18 percent) admit to taking money out of their savings to afford holiday shopping, one-third (31 percent) put their holiday spending on a credit card, 12 percent temporarily suspend putting money into their savings account, and one percent borrow money from friends.

However, some American families choose to make changes in personal behavior and spending habits to afford holiday spending. Instead of going into debt over the holiday or pulling money from other resources, one quarter (27 percent) choose to tighten their belt on all other spending.

Overspending During the Holidays

While some Americans are planning to stick to a holiday spending budget without exception (23 percent), many have areas where overspending can be an issue. Women are more likely than men to overspend on gifts for their children (40 to 27 percent, respectively), while men are more likely than women to overspend on gifts for themselves (six percent to two percent, respectively).

Surprisingly, gifts aren't the only thing causing Americans to overspend this holiday; food (eight percent) and vacations (seven percent) are also expected to drive people over budgets.

Student Loans, Car Payments and Medical Bills Slow Holiday Spending

Some Americans plan to stay away from holiday overspending altogether. When asked to describe which financial obligation is the greatest deterrent for overspending during the holidays, respondents cite worrying about increasing their credit card debt (13 percent) or losing one's job as a key factor (12 percent).

Holiday spending priorities also vary with age. Younger Americans, age 18 – 34, are more worried about making their car payment (11 percent) and paying their student loans (nine percent), while the oldest Americans, age 65 and older, are more likely to spend less on the holidays so they can pay medical bills (11 percent).

Overall Financial Security and Confidence

Americans are equally split when rating their overall level of financial security. Nearly half (49 percent) rate their overall level of financial security as excellent or good, while half rate their financial security as fair or poor (46 percent).

Aside from holiday spending, more than half of Americans (52 percent) have been able to set aside money for savings over the past two months than not (41 percent). Nearly six in ten (58 percent) say they are very or somewhat likely to feel they will have enough money to enjoy a comfortable retirement in the future, yet three in 10 are still not confident that they will have a comfortable retirement (29 percent).