Many US consumers are ready to spend big, but not Boomers

Featured

Written by:

While the coronavirus pandemic has changed the way people shop, U.S. shoppers appear willing to throw down some bucks — particularly for larger purchases — in the near future.

report from TD Bank finds that the average amount doled out on major purchases so far in 2021 ($1,854) decreased slightly from 2019 ($1,884). But 70% of consumers say they’re likely to spend on a big-ticket item (anything that costs $500 or more) in the next six months, so that average could rise.

Millennials more likely to spend on major purchases

Among those surveyed, millennials (ages 23 to 38) are the spending pacesetters, with 80% saying they plan to make a major purchase in the next six months.

They’re also out-purchasing other age groups, making an average of 3.7 big-ticket purchases a year, compared to:

  • Gen Zers (ages 18 to 22) — 2.4 major purchases a year
  • Gen Xers (ages 39 to 54) — 3.1
  • Baby boomers (ages 55 to 72) — 2.2
  • Members of the silent generation (ages 73 and older) — 2.5

Interestingly, Gen Z’s shopping habits mirror older generations more than younger ones. They’re more likely than any other age group to make a major purchase at a brick-and-mortar store, with help from retailer financing. Plus, the purchases are sparked by a life milestone event — a new job, anniversary, graduation or a first apartment, for example.

Consumers spend more with store-branded credit cards

According to the TD Bank report, shoppers with retail credit cards are more inclined to make large purchases and spend more. Among survey participants, nearly half (46%) who carry store-branded credit cards have at least three such cards. More than 6 in 10 (61%) respondents say the top perk is additional discounts on purchases, while 37% cite financing options.

So where is their money going? In the past year, 43% of consumers made at least one major purchase on electronics and music equipment, followed by:

  • Appliances (39%)
  • Furniture (35%)
  • Home improvement items (35%)

To make these big-ticket item purchases, consumers do tap into financing options. Among those surveyed, 39% say they are more inclined to shop with a retailer with no-cost or low-interest installment options.

In fact, 1 in 5 applied for some sort of retail financing with their last major purchase, and 3 in 4 say their ability to get financing influenced how much they wanted to spend.

Consumers want various financing options

This holiday season, nearly half of U.S. consumers (46%) say they’re more inclined to purchase from retailers that offer different financing options, from credit cards to installment loans.

If you’re planning on going big this holiday season on gifts, stick to a budget to avoid debt and set alerts to monitor your spending, whether that’s with a retailer credit card or cashback credit card.

Another way to curb your spending is to do most of your holiday gift shopping from a couple of retailers you love, making the most out of promotions and discounts.

Methodology: TD Bank commissioned Maru Public Opinion to field a survey of 1,001 U.S. adults ages 18 and older who made a major purchase ($500+) in the past 12 months, conducted Sept. 3-10, 2021.

This article originally appeared on LendingTree.com and was syndicated by MediaFeed.org.

More from MediaFeed:

15 ways you can control your holiday spending

15 ways you can control your holiday spending

The holidays are meant to be filled with cheer and thanksgiving, but they’re often overshadowed by lengthy and expensive shopping trips to our favorite retailers. We get caught up in the overall excitement of the season and feel the need to buy gifts that don’t necessarily fit within our budgets. In general, the holiday season is one of the busiest times of the year for most businesses because of how many people are out shopping or making purchases online.

To help you uncover some shopping savings and thrive in an uncertain economy this year, we’ve compiled a list of 15 ways to avoid overspending this holiday season.

Related: 8 simple pieces of advice from Warren Buffett that any investor can use

gpointstudio / istockphoto

Do you know who’s on your shopping list? If not, you better check it — and then check it again. You may be feeling generous, but you don’t have to purchase gifts for everyone. There’s typically no reason to buy random things at the store for your neighbor or best friend’s cousin, so don’t feel like you need to.

When you’re creating your shopping list, mark the essential people you need to buy gifts for and remove everyone else. Every purchase adds up, so you don’t want to buy things just because you feel like you have to. You can always send a thoughtful card instead.

DepositPhotos.com

Before heading out to do your holiday shopping, be sure you know where your finances lie. Your money situation can change from one year to another, so don’t solely rely on the kind of shopping you did last year. Instead, consider your debt and come up with a total number you can’t or don’t want to cross as you make your holiday purchases.

If you stay under that number, you’ll have saved some extra money this year. The key is to have a number in mind so you’re more conscious about your spending as you’re out shopping.

SolisImages / istockphoto

Creating a budget is a key step in learning how to manage your money. As you look at your finances, it’s easier to set a budget if you break it down into smaller goals. For instance, you may want to spend less than $500 on gifts this holiday season, but how is that going to be spread out between family and friends? Will each person get a set amount, like $50, that you’ll stick to?

You don’t have to set an exact number for each gift, but it could help you stick to your overall budget. Think about how much you want to spend for each person, and then see whether the total amount of everyone added together is a number you can work with.

Looking at your finances will help you understand if you’re being realistic with your holiday budget. If it doesn’t seem realistic because of debt or other factors, you’ll simply need to chop it down a bit. This can be difficult because you want everyone to have nice gifts, but when it comes to your finances, you don’t want to overextend yourself.

Pekic

Gift cards are a popular gift option for any occasion, which can sometimes result in having a small collection of them in a kitchen drawer or cabinet. You have plans to use them, but you’re not quite sure on what yet and haven’t gotten around to buying anything with them. Your indecision could mean another person’s good luck — and I don’t mean because you’re going to re-gift a gift card.

Instead, you can use your gift cards to help fund some of your holiday shopping. That is, of course, if you have gift cards for popular retailers like Walmart, Amazon, Target, or any other store that sells a variety of products. With gift cards to these locations, you have a variety of options to choose from, which is perfect for gift-giving during the holidays.

AnthonyRosenberg

If you want to get the biggest bang for your buck on holiday shopping, there’s no ignoring the benefit of using credit cards. Many credit cards offer valuable rewards on purchases, including any purchases you make while shopping. You can typically earn rewards in the form of points, miles, or cash back. And then it’s easy to redeem them for cash, travel, gift cards, or more.

Cashback cards are especially useful for holiday shopping. Because you can earn cash back on every purchase, it’s like you’re getting an automatic discount on all your spending. Check out cashback cards like the Chase Freedom Unlimited or Citi Double Cash to help you earn rewards as you buy gifts.

Stevepb / Pixabay.com

Preparing for your holiday gift-buying trips can easily save you money on your purchases. Look through the weekly flyers, check out what deals are happening, and be sure to compare prices between different stores.

The whole process can be a lot less painless if you already have an idea of the types of gifts you’re looking for. Skip the flyers from stores that don’t sell the type of gifts you need and pull up online stores to quickly compare deals between multiple retailers. It doesn’t have to take a long time to know about upcoming sales and promotions, and it can be well worth the effort if you end up saving a lot of money.

If you’re already going to make purchases, use a shopping or cashback app to save yourself money and/or earn rewards on those purchases. With the Capital One Shopping app, you can get money back on purchases from select retailers and find available coupons as you shop online. Because the service is free, you have nothing to lose and lots of potential savings to gain.

You can also try out an app like Ibotta. This app offers cash back for making purchases on everyday items directly through the app or by using in-app offers. You can also submit receipts through the Ibotta app to receive even more cash back.

With these free apps, you get some help locating better deals or earning rewards on your purchases. This helps reduce the overall cost of your purchases and ends up saving you money while you shop.

dusanpetkovic/istockphoto

Couponing may seem a bit outdated, but if you’re wondering how to save money this holiday season, this tried-and-true approach may help. You can still find coupons in weekly flyers, and it takes only a few seconds to cut them out before you go shopping. Or you can use the alternative method of using online coupons at your favorite stores.

To check for online coupons, head to the store’s website or download the store’s app on your compatible device. Digital coupons are great because they can easily be shown and scanned to cashiers from your phone. Some stores allow you to add coupons to your online account, and they’ll automatically apply their discounts when you buy the applicable products using your membership number.

DepositPhotos.com

For creative individuals, a homemade gift can add that extra touch to a special time of year. Not everyone has the talents to pull off crafty and personalized gifts, but if you do, consider putting your skills to good use. It’s a great way to use items you already have around the house, which saves you money and still shows someone you’re thinking about them.

DepositPhotos.com

The end of the year is filled with stores doing different deals and promotions, including Black Friday and Cyber Monday. If you plan and prepare ahead of time, you can score big deals during the right times and save yourself loads of money. Most big stores will put out their Black Friday and Cyber Monday deals in flyers well before those dates, so you can take a look and see if anything lines up with your gift ideas.

Many stores are even extending their holiday sales because fewer people will be shopping for gifts in person this year. According to a recent FinanceBuzz survey, over half of Americans said they’re less likely to shop on Black Friday — so you might be able to take advantage of Black Friday deals well into December.

DepositPhotos.com

Although it can be worth your time to prepare for special sale days, keep in mind that you don’t actually have to buy anything when those sales happen. If there’s nothing on sale that actually fits what you’re looking for, don’t feel pressured to buy an item just because it’s a good deal.

Impulse buying isn’t unheard of during the holidays, especially when every store has deals going on. Pass on the things you’re unsure about and go for the items you know you want to buy. This can help save you from feelings of buyer’s remorse, as well as keep your finances intact.

DepositPhotos.com

If you’ve ever shopped online, it’s all too common to see stores offer free shipping, but only after you’ve spent a certain amount of money. For example, you’ll get free shipping on orders of $50 or above, but for orders under $50, you’ll have to pay shipping fees. And the shipping fees can be substantial.

This type of free shipping is often a trap for people who weren’t planning on spending the amount needed to get free shipping, but they also don’t want to pay for shipping. It’s a tough situation, but spending the extra money to hit the free shipping mark isn’t worth it if you’re not buying a lot in the first place. If the cost of your items and shipping is less than what you would have paid to get free shipping, you’re still saving money while paying the shipping fees.

jahcottontail143 / istockphoto

Not every gift needs to be a physical item. Rather, you can give the gift of an experience instead of a gift box for a loved one to open. Think about fun ideas like a hotel stay for your son or daughter and their significant other. Or maybe a trip to a museum, aquarium, or zoo with the kids or grandkids. An experience can provide great memories that last a lifetime and may cost less than an expensive piece of jewelry, toy, or a new game.

DepositPhotos.com

Once you’ve considered your finances and set up a budget, make sure you’re tracking your spending. If you’re using credit cards, it’s easy to log into your online account and check your credit card transactions. Otherwise, you can write your expenses down, keep your receipts, and/or keep notes on your smartphone or another device. If you don’t track your spending, it’s harder to know whether you’re staying under budget.

DepositPhotos.com

The general excitement and happiness of the holidays can lead to overspending on gifts and other things. To help prevent this, consider your bills for next year and make sure what you’re spending right now isn’t going to negatively affect necessary bills in the future. You may already have certain expenses planned for the coming months, like needed repairs or purchases that you can’t hold off.

It’s not as exciting to think about bills instead of buying fun gifts, but it’ll help you stay financially secure and keep your stress levels down when it comes time to pay those bills.

DGLimages/istockphoto

The holidays are meant to be enjoyed, and they should be. That doesn’t mean you need to spend all your money to appreciate the season and your time with loved ones. So while you’re doing your holiday shopping, keep these 15 tips in mind to help save some money on your purchases. It’ll make the season that much more enjoyable if you’re not losing sleep over money.

More from FinanceBuzz: 

This article originally appeared on FinanceBuzz.com and was syndicated by MediaFeed.org.

DepositPhotos.com

Featured Image Credit: martin-dm.

AlertMe