Bah-humbug: most people are cutting back on holiday spending this year

People are spending less on parties, presents, and cards as costs and expenses rise

While the world has mostly gotten back to normal, things are still up in the air economically speaking for a lot of people; when we look back, 2022 will likely be defined by inflation and the threat of looming recession, both of which have spooked the market and consumers. It's no wonder that, while consumers are back to shopping in-store again, they've shifted their habits to focus on deals and discounts.

Unsurprisingly, that financial stress has also altered the way people are thinking about spending during the holiday season.

A survey from Aflac found that over 80% of the 1,000 workers surveyed in October said they would be cutting back on holiday gifts and travel expenses this year, or that they would take on credit card debt this holiday season, due to financial concerns (that includes two-thirds who said they were doing so because of healthcare-related costs).

That includes 35% who said they'd cut costs on hosting parties, 33% who would spend less on attending parties, 33% who would reduce spending on presents, 26% who would cut down on sending cards, and 23% who wouldn't spend as much on work holiday events.

The cutting back on holiday expenses jives with the overall view of the economy, as 44% said they don't believe that their income has kept up with increases in everyday expenses, which was especially true of those with an annual income of less than $50,000. 

In all, 70% said they saw an increase in spending this year on what are deemed "necessary expenditures" compared to last year; that includes 56% who saw an increase in living expenses; 31% who saw an increase in mortgage or rent, or out-of-pocket healthcare expenses; 28% saw increased healthcare premiums; and 26% said they saw an increase in transportation costs, which likely means they were spending more on gas. 

Not only are people feeling underpaid, they're feeling overworked, which certainly explains the rise in employee burnout: 70% admitted they'll do at least some work during the holiday season, including checking work email, completing work assignments, and taking on additional gig or contract work.

A larger percentage of employees indicated they took less time off this year overall than those who said they took more time off, 31% and 26%, respectively. People aren't even taking their sick days, with 64% indicating they go to work even when they don't feel well, which doesn't sound great when we just had a pandemic that killed 1 million people.  

All of this is contributing to the decline in mental health, with 55% of all employees admitting that they feel more anxious during the holiday season, and 43% saying they feel more depressed. As a result, 37% admitted that they turn to alcohol or other intoxicants to get through the holiday season, though that's smaller than the 42% who turn to so-called "retail therapy," though both are larger than the 36% who go to actual therapy during the holiday season.

"The study paints a picture of the sacrifice many households are making this holiday season, because it's difficult to pay for necessities and health care costs," Diana Steinhoff, senior vice president, Aflac Benefits Solutions, said in a statement.

"The holiday-focused data brings awareness to how financial stress can affect the physical and mental health of Americans during what should be the most wonderful time of the year."

(Image source: debt.org)