ST. LOUIS — American families are expected to spend $184 billion on holiday gifts this year. But, with costs going up, how they shop may change.
Families around the country are struggling to keep up with higher prices while making lower wages. That's impacting spending strategies for the holidays.
The average American will expect to spend $831 on holiday gifts in 2023, Nerd Wallet reports. But for some families, that's not realistic, especially when they're still drowning in debt from last year's season.
The Urban League of Metropolitan St. Louis’ Financial Empowerment Center helps balance budgets and make every dollar stretch for St. Louis families, a service in high demand during the holiday season.
“Usually a season that’s full of joy and cheer-- our clients are struggling...That’s a lot of stress for our clients," said Kaleia Richardson, a Family Financial Empowerment Specialist with the Urban League. "Their backs are against the wall. There are clients who are also facing eviction.”
More than half of holiday shoppers across the country won't be able to buy as many gifts as they'd like to this year due to inflation.
St. Louis families are struggling to stay afloat due to other challenges.
“We have a large pool of clients who are currently unemployed, looking for jobs and struggling with debts," Richardson said.
Last year, just over half of Americans incurred credit card debt when shopping during the holiday season; among them, nearly a third still haven’t paid it off.
We asked Paula Carey-Moore, the Regional Vice President of Housing and Economic Empowerment with Urban League if that statistic surprised her.
“Unfortunately it doesn't,” she said.
Many shoppers are taking on a new tactic to get gifts under the tree.
Nerd Wallet also reported that nearly three-quarters of 2023 holiday shoppers plan to use credit cards this year to buy gifts. On average, they’ll spend $680.
It's a seemingly quick fix that could bring long-lasting headaches.
“If I charge 500 dollars, am I going to be able to pay it off next month?" Carey-Moore said. "We never think about that. We only think about ‘Oh, I only have to pay 15$ a month. We don’t think about the fact that this is costing you double.”
It’s a sentiment Dr. Mitch Ellison, Associate Professor of Finance at Webster University shares.
“I almost hate to say this out loud. But the best thing you do with credit cards is not to use them because oftentimes the credit cards allow you to buy things that you have to pay for later with additional interest," Ellison said.
We spoke with Ellison in November 2022 about the record-high inflation. This year, he says inflation is still a big problem, with one solution.
"Almost always, the thing that does inflation in is a recession," Ellison said. "During a recession, then the prices come back down. And that's really what we need to have happen. “
But, he said consumers can do their part to show retailers that prices are just too high, by reaching for more affordable brands, instead of the larger name brands.
"Once you start substituting down, that's the only signal that the producers get that they need to watch their prices,” Ellison said.
The Urban League says spending within your means can save you stress in the new year.
"We encourage taking advantage of food drives, donations, and second-hand shopping,” Richardson said.
Urban League Financial Empowerment Center has some workshops available for people looking to reduce debt and stay afloat amid high inflation.
"We encourage clients to schedule an advising session with a HUD-certified counselor so that they can create an action plan," Richardson said. "That gives the client and the counselor the chance to look over bank statements, expenses, debt so they can create a realistic and a smart plan."
The next workshop is Tuesday, Dec. 5. It's a homebuying workshop from 6:00 p.m. until 7:30 p.m. at the Urban League Headquarters at 1408 N. Kingshighway Blvd. To register for the workshops, contact the Urban League at 314-295-1878, or email Kaleia Richardson at karichardson@urbanleague-stl.org.
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