Ninety-four percent of consumers will spend the same or less on holiday gifts this year – most people between $200 and $500 - according to a survey by Western Union Payments. The survey found that:
- 30% of consumers have hidden a gift purchase from their spouse or significant other
- 60% will set a holiday budget
- 12% will spend nothing this holiday season
- 32% will spend less on each person this year
- 19% will shop only at discount stores
- 22% say they would pay off debt instead of buying gifts if they had the choice; only 2% would save the money
- 20% will buy a holiday gift for their work colleague; 19% of those report they will do so because they feel obligated
- 6% acknowledge they will give bosses, clients or colleagues gifts to gain favor in the coming year
- 40% consider government the biggest ‘Scrooge’
David Shapiro, a 20-year veteran in the payments industry and a senior vice president of Western Union Co.'s Payment Services division, offers these tips for avoiding a January "financial hangover."
- Ask gift recipients if they have a “wish list” online. People who have wish lists on retail sites usually have a large list with a spectrum of price points with something that would fit in one's budget. Don't forget to calculate shipping fees before clicking “purchase.”
- Choose two to three Web sites to do all the holiday-gift shopping. Shipping costs add up during the holidays, but most sites offer free shipping when consumers spend at least a certain amount. Shop at a few sites to find free shipping. Shopping online reduces the opportunity for impulse buys that can blow a budget.
- Make purchases with a prepaid gift card. Before starting holiday shopping, set a budget, then buy a prepaid gift card for that specific amount. Make a promise that when the card is done, shopping is, too.
- Plan now to pay December bills on time, to allow a fresh start in January when holiday bills arrive. Take advantage of a same-day payment options to ensure just-in-time payments to billers and creditors.
- Give the gift of cash. Giving loved ones prepaid gift cards – like cash - or wiring cash gifts helps people stick to their holiday budget. They won’t be enticed by store sales and promotions to spend more than they plan on a loved one. In a recent Western Union survey, more than half of respondents said that they would prefer a $100 prepaid gift card to a noncash gift valued at $100.
- Shop for new gifts at consignment and thrift stores. Many major retailers donate brand-new in-the-box items that they no longer have room for to local charities to sell at significant discounts. Gift recipients will never know this budgeting secret,
- Stocks make great gifts, for the long term. Instead of buying designer jeans, jewelry, MP3 players, CDs or home furnishings as gifts, give loved ones stock in the actual company. Stocks are usually cheaper than what the company is selling, and in a few years, a loved one may be able to buy double or triple what the gift giver could have given this year.
- Use holiday e-cards. When developing a holiday-card list, consider sending e-cards to save on postage and card costs. It is better for the environment, too. If people do decide to mail their holiday cards, they should be sure to include the cost of postage in holiday budgeting.