It’s going to be a lean Christmas for a lot of Americans. And that’s despite record low unemployment and interest rates, economic indicators that normally provide Americans with the holiday cheer to open their wallets and purses.

That’s because several polls are finding Americans are going to think twice about big holiday gifts this season. They will settle for smaller gifts under the tree. This is according to several recent polls.

Tight Spending on the Holidays

“Just 53 percent of U.S. adults will buy a Christmas gift that costs at least $50 this holiday,” according to a new report. It polled some 1,100 adults in the United States. The survey also found that it is not just those with modest incomes who are thinking twice about taking out that credit card.

“Well over 4 in 10 (44%) of the richest respondents (those with annual household incomes of $80,000+) plan to keep their most expensive holiday gift under $100,” according to the survey.

Why the Christmas sticker shock?

Workers Are Still Wary

Matt Schulz,’s senior analyst, says he was surprised by the poll results given the stock market’s recent strengths and low unemployment rates. The spending caution, he adds, is probably because many workers are pessimistic about their prospects.

“I think part of what is going on is most Americans don’t see a raise any time in their future. And when you don’t think you are going to make more money in the next year, it will make you less likely to spend big on the holiday,” he says.

Another problem, Schulz adds, is “with the Great Recession still relatively fresh in peoples’ minds, most Americans seem to be planning a frugal holiday–think sweaters not cell phones.”

Part of what is spooking gift givers is how they will pay bills coming due in January. So some will pay for the holidays with money they don’t have yet. recently found that 54 percent of those surveyed said they “already planned to spend next year’s tax refund to pay for holiday shopping.” That’s even though they won’t have their tax refunds for months.

Those without Holiday Cheer

And then there are those whose pending holiday bills are turning them into Scrooges.

Mr. Cooper, a non-bank mortgage servicer in Dallas, says a third of some 1,155 households surveyed said they “at least somewhat wished they could skip the holiday season rather than spend money on gifts.”


A bank official said that, with U.S. consumer debt growing by half a trillion dollars each year, the stress of debt is taking its toll.

“Our data confirms that the debt crisis is an ongoing issue,” said Jay Bray, Chairman and CEO of Nationstar Mortgage Holdings, the holding company for the Mr. Cooper brand. He noted that home equity is “at its highest levels” since before the mortgage crash of 2008.

What’s to Be Done?

With all this debt building up, advisers say consumers should think carefully before going on a holiday buying binge. What should they do? Here are some tips.

Shop with a Plan

Have an idea of what you want to do before you go shopping. “Have a plan,” Schulz says, “before you start spending.”

Have a Budget

It’s fine to buy holiday gifts, or anything for that matter, if you have decided beforehand how much you want to spend and set and live with a limit on spending. This is key. Otherwise in January you will be trying to figure how you can pay for bills, bills that you will not immediately be able to pay off.

Transacting not Revolving

If you put yourself in this position, you will be violating one of the most essential principles of sound money management. The latter is a principle that is constantly preached here at You will be paying up to 20 percent interest on top of all the purchases you make in the holiday season. You will no longer be transacting—paying bills off each month and paying a zero percent interest rate—but you will be revolving, paying 20 percent interest or so. This is something the credit card companies love because it can keep you indebted to them for years and years. Credit card companies love revolvers. They hate transactors (Privately some card companies call transactors “leeches,” or worse. Some of their words, which are rarely said in public, can’t be mentioned here).

Have a wonderful, healthful holiday season. But be sure it is one in which you’re not constantly worrying about how you will pay for it when the bills come due in January.

Gregory Bresiger
Gregory Bresiger

Gregory Bresiger is an independent financial journalist from Queens, New York. His articles have appeared in publications such as Financial Planner Magazine and The New York Post. His latest book "MoneySense" is available on Amazon. Got a question, comment, or anything else you'd like to provide? You can contact Gregory at:

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