SAN ANTONIO--(BUSINESS WIRE)--Despite recent reports of declining household income, a new survey commissioned by USAA shows that more consumers will purchase gifts this holiday season.
USAA’s third annual holiday spending survey indicates that slightly more people plan to buy gifts this year compared to last year (96 percent versus 90 percent). In addition, only 31 percent of people surveyed plan to spend less on gifts, compared to the 40 percent of respondents who planned to spend less in 2010.
USAA’s survey also shows that the number of respondents who plan to create a holiday gift budget has declined over the past three years – from 64 percent in 2009, to 61 percent in 2010 and 57 percent in 2011. Of those who do plan to create a budget, slightly fewer plan to stick to it this year versus last year (43 percent versus 46 percent). And, 36 percent aren’t saving in advance to pay for holiday purchases.
“Our survey findings indicate that people may be suffering from ‘budget fatigue,’ and are planning to do a bit more holiday shopping,” says June Walbert, a USAA CERTIFIED FINANCIAL PLANNER. “We encourage all shoppers to commit to a budget before hitting the mall this holiday season, so they don’t overspend into debt.”
Consumer Sentiment Down Slightly
While consumers surveyed say they plan to buy more, positive consumer sentiment about the holiday shopping season has moved in the opposite direction. This year, one in three respondents (35 percent) said that the negative movie titles “Surviving Christmas” and “Scrooged” best describe their approach to a holiday budget, compared to only 30 percent in 2009 and 2010.
“The survey results show that while consumer outlook isn’t necessarily merry, we’re seeing people begin to accept that economic volatility is the new normal, and that may not change anytime soon,” says Walbert. “Still, if people do choose to spend a little more this holiday season, they must be prepared to cut back in other places to remain financially healthy.”
Credit-Card Comeback
According to USAA’s survey, nearly half (48 percent) of this year’s respondents will pay for gifts using a credit card, which is slightly up from 45 percent in 2009 and 42 percent in 2010. Of the consumers who plan to use a credit card to make holiday purchases, the majority (73 percent) plan to pay off their balance immediately, but the rest will wait a few months, or make only the minimum payment required.
“Credit cards have many benefits, including general convenience, the ability to reap rewards, and fraud protection,” says Walbert. “However, financially responsible shoppers must remember to pay off the balance each month to avoid paying interest fees.”
USAA, a financial services provider with fully integrated solutions that focuses on serving military members and their families, commissioned the survey to determine how consumers plan to approach their holiday spending and budgeting activities this year compared to its 2009 and 2010 surveys on the topic.
Click here to see more survey results.
About USAA
USAA provides insurance, banking, investment and retirement products and services to 8.6 million members of the U.S. military and their families. Known for its legendary commitment to its members, USAA is consistently recognized for outstanding service, employee well-being and financial strength. USAA membership is open to all who are serving or have honorably served our nation in the U.S. military – and their eligible family members. For more information about USAA, or to learn more about membership, visit usaa.com.
Survey Methodology
The 2009-2011 Holiday Surveys were commissioned by USAA to provide information on consumer spending and budgeting habits for the 2009, 2010 and 2011 holiday seasons. InfoGroup/Opinion Research Corporation (ORC) conducted telephone interviews during the period of September 30 - October 2, 2011, with 1,011 adults in a random sample of households (one interview per household). ORC weighted the survey results by four demographic characteristics – age, sex, geographic region and race – to ensure reliable and accurate representation of the total U.S. population 18 years of age or older. The raw data are weighted by a custom-designed program which automatically develops a weighting factor for each respondent. This report is based on a weighted total sample of 1,000 respondents. The sampling error associated with a sample size of 1,000 is no more than plus/minus 3.1 percentage points at a 95 percent confidence level.
Click here to subscribe to Mobile Alerts for USAA.