Only high earners can “easily afford” holiday Spending in 2024, according to survey!
This holiday season, only a select group of shoppers feel they can “easily afford” spending money without falling into debt. However, even among this group, many expect financial strain. A recent survey by Morning Consult found that 52% of shoppers earning $100,000 or more say they can “easily afford” holiday expenses in 2024, the highest rate among all income groups.
For those earning between $50,000 and $99,900, only 33% feel they can comfortably cover holiday costs, while just 18% of people earning below $50,000 believe they can manage them without difficulty. Morning Consult conducted this survey with 2,201 U.S. adults between August and September.
“Inflation is like a regressive tax. It hurts lower-income people more than higher-income people because it takes out a larger chunk of their wallet”, said Sofia Baig, economist at Morning Consult.
Some Are Even Going Into Holiday Debt
About 20% of Americans surveyed said they’ll need to take on debt to afford holiday celebration. Credit card balances, however, can be hard to pay down. NerdWallet’s recent survey found that 28% of 2023 holiday shoppers are still paying off last year’s holiday debt. The average interest rate for credit cards is around 20.50%, slightly lower than the 20.79% peak in August. Retail credit cards, however, carry an even higher average rate of 30.45%, according to Bankrate.com.
“Credit cards charge really high interest rates. If you’re only making minimum payments on that debt, it is very possible to remain in credit card debt for a long time”, said Sara Rathner, a credit card expert at NerdWallet.
Higher Earners Fear The Less
Higher-income households were less affected by inflation than lower-income ones, according to Baig. Higher-income people are “more buffered from the pains of inflation” as they have more “wiggle room in their budget to save and to spend”, Baig added.
“Higher-income consumers are not nearly as price sensitive. They’re not nearly as budget conscious as people in lower-wage-earning brackets”, said Stacy Francis, president and CEO of Francis Financial, a financial planning firm in New York City.
In another report, Morning Consult found that 68% of respondents earning $100,000 or more could cover three months or more of basic expenses without income. In comparison, 47% of those earning between $50,000 and $99,900 have three months’ worth of savings, while only 22% of respondents earning less than $50,000 have similar financial stability.
These savings and high incomes give affluent households the flexibility to spend on holiday shopping. For lower- and middle-income consumers, however, this level of financial security is much harder to achieve, Baig noted.