A financial time bomb: Experts worry about holiday spending trends
WASHINGTON (TND) — If you are still waiting to book a flight for Christmas, the best deals may have already passed.
The National Desk is moving past Thanksgiving and looking at the cost of Christmas. The team is going through reports from websites tracking holiday travel costs and consumer spending for Christmas 2022.
The 2022 holiday travel outlook from Hopper puts the average cost to fly around $463 for Christmas. Hotels may run you $218 per night and a rental car for $53 a day.
When it comes to spending, an October report from Deloitte found the average household will spend $1,455. But consumers plan to buy fewer gifts; nine this year compared to 16 in 2021.
But experts worry holiday spending trends could become a financial time bomb.
I think that people are either going to spend down their savings or they're going to go into debt. And I do worry that in Q1, we may have a real holiday debt hangover because there is a lot of sticker shock associated with this," Ted Rossman with Bankrate said.
But many consumers do not have the money upfront. The National Retail Federation released its consumer trends and retailers' plan report, finding 43% of consumers say they don’t earn enough money to cover the costs of gifts and other holiday items this year. In addition, 25% of respondents will use services like "buy now, pay later."
"By now, pay later can conceal that true cost of ownership. It doesn't sound that bad when you break it into monthly installments. But that's kind of part of the mental accounting trick that can get you into trouble," Rossman said.
Sticker shock is also changing habits. Bankrate is tracking consumer sentiment and found 86% of holiday travelers with a household income of less than $50,000 are changing their holiday travel plans due to rising prices
