What Percentage of American Families Struggle to Buy Presents for the Holidays

Rising prices are squeezing millions of Americans' budgets, leading many financially stressed families to pull back on gifts.

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College prices for gas and groceries are taking a cost on Jen Kendra's finances, and she's had to brand some difficult tradeoffs this holiday season.

Her kids will be getting smaller gifts. The rest of the family won't get whatsoever at all.

Kendra, who lives with her husband and ii immature children in the Chicago suburbs and works part-time as a banking concern teller, is paying double to make full every week at the pump.

"I have seen such an uptick in prices with food and gas," she said. When she drives by the gas station near her home, she oftentimes finds herself screaming at the big signs that list the latest prices.

Kendra describes her family as lower-heart-class. She has started to employ coupons more than ofttimes to purchase groceries, and she shops more ofttimes at discount stores similar Aldi to country the lowest prices. Sometimes that means driving longer distances to find cheaper food. "Anywhere I can notice a deal or a bargain, I'thousand trying to."

Federal stimulus checks accept helped her family, but the money dried up earlier this year. Their $550 a month from the expanded kid taxation credit has too been a boost, and goes toward paying for preschool for their younger son and credit bill of fare bills for groceries and gas.

Kendra and her hubby saved up to buy a Nintendo Switch for their kids, ages 7 and four, but returned it two weeks later because their water heater unexpectedly blew out, costing them $i,500.

"Not existence able to provide them with that Nintendo Switch was heartbreaking for me," she said.

Instead, she turned to Facebook's market place for the beginning time to buy used toys, and as well is getting the kids Play-Doh and Hot Wheels. The couple won't be exchanging gifts with each other this year or buying presents for their parents and relatives.

"Things are really hard right now," she said.

College prices for TVs and sports stuff

They're inappreciably lone. Rising prices are squeezing millions of Americans' budgets, leading many financially stressed families to pull back on gifts.

Prices rose 6.8% in November from a twelvemonth earlier, the highest level in 39 years. Grocery prices have increased vi.4% annually, and meat was xvi% more expensive in November than it was a year agone, while fish and seafood prices were up viii%.

Energy prices jumped 33.3%, including a whopping 58% increment in gasoline.

Merely not all shoppers are impacted equally by higher prices.

College-income consumers — who have more cash on hand for discretionary purchases — are ameliorate able to weather high bouts of inflation than lower-income shoppers, who spend a greater percentage of their income on fuel and basic essentials.

This leaves them more than vulnerable when food or gas prices spike, reducing the amount of coin they have left over to purchase hot vacation gifts similar electronics or games or not-essentials.

Although wages are rising swiftly, they still lag inflation.

"Aggrandizement has been more painful for lower-income households," Bank of America economists said in a research report concluding month.

Surging prices on essentials will have an impact on budget-constrained shoppers' spending on holiday gifts, which are also more expensive than last twelvemonth.

Apparel cost 5% more than in Nov than it did a year ago, jewelry was upwardly 6.7%, televisions 7.ix%, sporting appurtenances viii.4%, and furniture 11.eight%.

Holiday shopping disparity

Holiday spending is expected to boilerplate $1,463 per household, upward 5% from 2020, according to a consumer survey from Deloitte published in Oct.

Merely the consulting firm predicts huge discrepancies in spending among income groups, driven in role past inflation.

While consumers with an almanac income to a higher place $100,000 will increase their holiday spending past fifteen% from last yr, holiday spending will tick upwards only 3% among shoppers who earn betwixt $50,000 and $99,000 annually.

And for consumers making less than $fifty,000, spending will drop by 22% over this year'southward holiday stretch.

"At that place is a tale of two vacation seasons, with higher-income households planning to spend v times that of lower-income households," Deloitte said. "The majority of this flavour'south gains will be driven by higher-income shoppers."

Many low-income shoppers volition sit down out the vacation spending season entirely, co-ordinate to Deloitte.

Some retail chains have recently said lower-income customers are feeling the touch of aggrandizement and have pulled back on discretionary spending.

"Inflation in food, gas, services and other necessities is creating financial pressure level on our lower-income client base," John Swygert, CEO of Ollie's Bargain Outlet, said on an analyst call this month. "Nosotros are [seeing] that those customers are shopping less frequently merely from the mere fact that they have less dispensable income."

Walmart has noted that it's actively trying to keep gas prices down to attract customers worried about how much they're paying at the pump, especially equally federal stimulus benefits wane.

"Gas prices are a business concern….They're up dramatically versus a yr ago," Walmart CEO Doug McMillon said on an analyst call terminal month. "The customers had money [and then]. And at some point, that'southward going to come to an finish."

For Erin Leonards, who lives in southwestern Louisiana, "gas prices are what kills me." She now spends $fifty to make full her tank these days. "It used to be $30 at most," she added.

Rising gas prices are squeezing Leonards, who has three young children, ages two, 4 and half-dozen. She is in beauty schoolhouse and works part-time at a fried chicken restaurant, earning less than $50,000 a year.

Leonards said she bought 18 to 20 presents concluding Christmas for each of her kids and besides purchased gifts for her iii godchildren, also as nieces and nephews.

This Christmas, she is ownership only four presents for each of her three kids, telling them to pick "something you want, something you lot need, something you wear, and something you read."

Leonards said her children understood when she explained that "Santa wanted to endeavor something new this year" with presents. Merely she notwithstanding felt guilty she couldn't get them as much equally she did last year.

Rising inflation on essentials, combined with a pullback in federal stimulus, volition also make it harder for budget-strapped consumers to purchase discretionary goods in 2022, Goldman Sachs retail analysts said in a research report this week.

This may impact both retailers that tailor to lower-income shoppers and the US economy more broadly.

Side by side year, the "consumer focus volition likely shift towards [finding] value on key essentials while discretionary spending declines," the analysts said. Lower-income shoppers "are probable to remain under meaningful force per unit area."

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Source: https://wtop.com/national/2021/12/things-are-really-hard-right-now-rising-prices-make-it-harder-for-some-families-to-afford-holiday-gifts/

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