Americans are still feeling the financial strain of the COVID-19 pandemic this holiday season, and more are stressed about shopping than they were in 2020, according to a new survey from Experian.
About 32% of respondents said COVID-19 has created financial barriers that have prevented them from spending the way they would like during this holiday season, according to Experian’s 2021 holiday shopping survey. However, this represents a 20% decrease from those who said the same in 2020.
But while Americans feel more financially free than last year, the pressures of the season remain strong. Thirty percent of respondents said they are stressed about holiday shopping, up from 25% in 2020, the survey showed. Another 26% said they are overwhelmed by shopping, up from 21% last year. And 25% said they are anxious about shopping, up from 24% last year. Overall, 58% of respondents said holiday spending puts a strain on their finances.
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Gen Z consumers more likely to struggle this holiday season
The survey found that among all the generations, Gen Z consumers — or those born between 1997 to 2012, according to Beresford Research — were more likely to struggle with their budgets this holiday season. Experian spoke to older Gen Z consumers ages 18 to 24 and found that 45% said it is hard to stay on budget while holiday shopping. Another 39% said running out of money prevented them from holiday shopping and 42% said more shopping than originally planned had been added to their list.
In addition to budgeting, Gen Z consumers are also struggling the most with access to credit, the survey found. Of all the respondents who said they do not have access to credit to buy gifts, 20% were from Gen Z.
However, younger consumers are also the most motivated to improve their finances. Seventy-nine percent of older Gen Z consumers said they will better their finances this year, while another 89% of Millennials ages 25 to 34 said they are motivated to do the same.
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How to get through the holidays if you are struggling financially
In order to get through the holiday season while minimizing financial stress, here are a few steps you could take:
Create a holiday budget
When it comes to the holidays, new expenses could come up throughout the season for celebrations, gifts and food. And this year’s record-high inflation levels could make things even more expensive, as retailers raise prices on certain goods.
But setting a budget and sticking to it can help you get through the holidays without overspending. Brainstorming everything you'll need, while potentially leaving some extra money for fun, will help ensure your success. Once you're all set, you can search for holiday sales or compare prices online to complete your list while staying within budget.
Take out a personal loan
While it's not recommended to use credit to pay for holiday shopping, a personal loan is a better option than credit cards, if needed. This is because personal loans have much lower interest rates and will set borrowers on a plan for repayment.
Consumers can also take out a personal loan to pay off any debt accrued during the holidays. Experian’s survey showed that 59% of consumers said they will pay off credit card debt in this way. Taking out a personal loan can help consumers pay off their debt by consolidating their payments and lowering the amount that's paid toward interest. Visit Credible to see what personal loan options are available to you and how much you could save.
Organize a gift exchange
Buying gifts for family and friends can be stressful. Who should you buy gifts for? How much should you spend? What if they buy you something and you didn’t buy them anything in return? A solution could be a White Elephant or Secret Santa gift exchange. Organizing this type of gift exchange allows you to set a price point for loved ones and reduces the gifts you are responsible for buying. This will help you stay on track for your budget.
If you are struggling financially and have accrued debt during this holiday season, you could consider taking out a personal loan to help pay it down. Contact Credible to speak to a personal loan expert and get all of your questions answered.
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