People are feeling the pain of holiday shopping, as gift-buying is in full swing on the tail of record-high inflation. A new report shows with that inflation, Americans are spending more than ever. It also means people are taking on more debt.
“I feel like I’m going broke trying to afford things,” said Nancy Garcia Mendoza, who was doing some holiday shopping at the Renton Landing.
A new report from the Bureau of Economic Analysis with the U.S. Department of Commerce says Americans only saved 2.3% in October, which is a 17-year low. Meanwhile, overall spending went up by about 0.8% or $148 billion.
People say where they’re feeling hardest hit by inflation are on the necessities – food and gas.
“Definitely dipping in savings,” said Lora Shaw, also at the Renton Landing on Friday.
With Christmas approaching, it’s the first real holiday gathering for some in two years; hence some are still choosing to shell out for presents.
“How much would you guess you’re spending this holiday season on gifts?” KIRO 7′s Deedee Sun asked. Garcia Mendoza covered her face and said, “Probably $1,000 or $2,000… I spent $500 last year.”
“Probably twice as much as I spent last year,” said MJ Alfaouri, also shopping at the Renton Landing.
But others say a tight budget means this Christmas will be a little different.
“Getting together, having a good meal versus buying gifts. No gifts,” said Lynn Benard, another shopper.
Arrin Wray is a financial expert with Decker Retirement Planning, which has offices in Bellevue and Renton. Wray’s advice? Resist the temptation to put holiday shopping on a credit card. Rising interest rates mean some credit cards have hit records, charging 30% interest.
“It’s really hard to dig yourself out of that hole if you have a substantial amount that’s due on 25-30% interest,” Wray said.
He says to talk with your family and set expectations for the holidays so you can stay within your means.
“Saying, hey, this might be a little bit tight this year, maybe we do this or give the gift of my time to show you’re still grateful for them and you love them,” Wray said.
Another piece of advice from Wray – don’t be tempted by a good deal on something you don’t need.
“It’s important to know you’re not saving money by getting a good deal on something - you are still spending,” he said.
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