More than 40% of respondents are still facing recession anxieties, which include the impact of the election, according to TD Bank’s 2024 Merry Money Survey.
TD Bank, America’s Most Convenient Bank®, announced the findings of its 2024 Merry Money Survey, revealing that more than half (52%) are scaling back their spending due to recession anxieties, and more than four out of every ten (42%) respondents are weighing their holiday spending behavior based on the impact from this election. Despite these concerns, 79% of consumers still feel confident in their ability to manage their holiday spending, with 64% indicating that they plan to spend less than $600 in total on gifts.
“That’s why trying to stick to a budget remains one of the most important steps consumers can take to help ease some of the stress that comes with the holiday shopping season.”
TD polled 2,000+ U.S. consumers regarding their shopping and overall money management habits ahead of the holiday season. The survey found that shoppers are seeking out those special deals this year, with 82% indicating that they are actively looking for offers and price reductions for their shopping.
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“The uncertainty of an election season, coupled with the current volatile economic environment, is making this holiday season even more stressful for consumers,” said Courtney Mitchell, Retail Market President, Metro PA/South Jersey Region at TD Bank. “That’s why trying to stick to a budget remains one of the most important steps consumers can take to help ease some of the stress that comes with the holiday shopping season.”
Have Yourself a (Budget) Mindful Holiday
Though interest rates and inflation are trending down, shoppers are still getting strategic with their spending and taking advantage of seasonal deals. In fact, more than half (55%) of respondents plan to make the bulk of their purchases on November’s Black Friday.
To further combat overspending, 81% of respondents have considered ways to keep their budgets in line. Some shoppers are spending less this season, with one-third (33%) of respondents indicating that they are reducing their gift spending compared to previous years. As another way to avoid overspending, 22% are setting aside extra money in advance of the holidays. Additionally, 61% of people are cutting back on other discretionary spending, such as dining out, in preparation for holiday budgets.
While many are focusing on saving, Gen Z stands out as the most likely to indulge in self-gifting, with 38% admitting to going over budget to buy gifts for themselves, compared to 30% of Millennials, 25% of Gen X, and 17% of Baby Boomers.
Shoppers Unwrapping Memories
This year’s survey also revealed that shoppers are gradually shifting from traditional wrapped presents to experiences, reflecting a change in how they approach holiday giving. Nearly half (45%) of consumers plan to gift experiences over physical items, with younger generations leading the way. Gen Z (68%) and Millennials (61%) are at the forefront of this movement, while Baby Boomers (23%) remain more attached to conventional gifts.
The trend is particularly strong among higher-income households, with 55% of those earning $100,000 or more opting for experiential gifts. Dining experiences top the list, as 53% of consumers who will gift an experience plan to treat loved ones to a special meal or evening out.
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All I Want This Year is Purchase Protection
When it comes to holiday shopping, consumers are prioritizing both rewards and security in their payment choices. Debit cards still lead the way, with 42% of shoppers choosing them as their preferred method of payment. Credit cards follow closely at 34%, with many consumers drawn to the perks they offer and 69% of those who prefer credit cards citing rewards or cash back as the primary reason for their choice. Additionally, 31% of credit card users say the enhanced protections provided by credit cards, such as fraud prevention and purchase protection, are key factors in their decision. Meanwhile, 18% of respondents still prefer cash or checks for their holiday spending.
“During the holiday season, shoppers are not only looking for great deals but also for added protections that provide peace of mind,” said Chris Fred, Head of Credit Cards and Unsecured Lending at TD Bank. “Using a credit card for holiday spending can offer shoppers benefits like fraud and purchase protection, cell phone coverage, emergency card replacement, and identity theft protection, allowing them to shop confidently knowing their purchases and personal information are secure.”
Festive and Financially Fit
Despite the holiday season bringing some financial uneasiness for many shoppers, there’s a silver lining as consumers remain optimistic about managing their budgets and are taking the steps to remain financially well in periods of increased spending. Nearly three-quarters (73%) of respondents admit to feeling financial anxiety, yet most are determined to stay on top of their spending.
Most consumers (86%) who have overspent during past holidays have considered adjusting their future holiday spending habits to avoid overspending. Additionally, 62% of credit card users plan to pay off their holiday shopping balances in full by January 2025. This shows a proactive approach to financial management, with many consumers seeking out deals and being thoughtful of their spending habits. Even in the face of high gift prices, shoppers are determined to enjoy the season while keeping their finances in check.
With global trends top of mind for many this holiday season, consumers also revealed:
- Jingle All the Way, AI is in Play: Almost one-fifth (19%) of respondents are considering using generative AI for their holiday shopping ideas this year. Of those respondents, more than two-thirds (69%) indicated that they have a preference for brands that offer AI or virtual reality features.
- Some Gifts Come with Expectations: Of those who do plan to give cash gifts, more than half (52%) of respondents have a specific hope for what recipients will use the money for.
- In Hopes that Retirement Soon Would Be Here: Alarmingly, 17% of respondents have adjusted their contributions to their retirement savings in order to account for an increase in holiday spending. This change is most noticeable among Gen Z and Millennials, with 25% of each group making adjustments, compared to just 14% of Gen X and 7% of Baby Boomers.
“Budgeting, maximizing deals, and strategically using credit card rewards are all great ways to keep spending in check. By planning ahead and taking advantage of available offers, people can enjoy the holidays without the financial strain that can follow the season,” added Mitchell.
