‘Tis the Season to be Saving

December 2, 2009 by  
Filed under Money and Behavior, Spending

The retailers are nervous about the final outcome of the Christmas selling season. Do they have reason to be concerned? It seems that they do.

The National Foundation for Credit Counseling (NFCC) conducted a survey to determine how consumers intended to fund their holiday shopping this year. The 3800 survey respondents said this:

Paying cash for my purchases = 68%

Charging my purchases, and paying the bill in full when it arrives = 12%

Charging my purchases, and paying for them over time = 10%

Utilizing lay-away programs = 10%

That 68% “I’ll pay cash” number is significant, almost to the point of being radical. The question is whether these good intentions will be fulfilled. The issue is that the 2009 NFCC Financial Literacy Survey revealed that at least 1/3 of all consumers have zero savings. So where is that holiday cash going to come from? Will spending temptation prevail over common sense?

The NFCC survey also asked consumers what they would do if an extra $500 showed up in their bank account this holiday season. The responses were also interesting:

77% said they would pay down debt

14% said they would put it in savings

7% said they would use it toward holiday expenses

2% said they would spend it on themselves

Mr. ToughMoneyLove has to show his skepticism here. I think that 2% “I will spend it on myself” number is way too low. There are lots of folks who have been denying themselves over the past year. There are even more folks who fantasize that they have been denying themselves.

In either case, an extra $500 will be hard to resist, particularly if their debt load is many $ thousands more than that. People who owe gobs of money tend to discount the importance of making small sacrifices to turn their finances around. They pretend that it’s meaningless or even hopeless. It’s not.

I hope that this is a season of saving for most people. My wants and expectations for Christmas gift-giving are definitely scaled back. I am 100% content with that attitude across the board. I have plenty to enjoy already.

How about you? Will this be a saving season or spending season?

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5 Responses to “‘Tis the Season to be Saving”
  1. wrc1000 says:

    In October, I went back to my part-time, weekend job (that I had left in Dec 08). Where are those $$$ going?: right into the principal of our mortgage (our last and only debt). Keep up the good posts.

  2. Evan says:

    “Paying cash for my purchases = 68%

    Charging my purchases, and paying the bill in full when it arrives = 12%”

    80%! I doubt it…We’ll have to see the first quarter consumer debt level

  3. MasterPo says:

    Evan – I agree. I think faaaaaar more people are charging and spreading out the payments than want to admit. :-(

  4. Rick Beagle says:

    I have my doubts as well, but honestly, our family decided a long time ago on cash only Christmases. Who knows, maybe there are more of us frugal people out there than we presume. Guess we will find out.

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