Despite reports finding an overall optimistic holiday consumer this season, many Gen Z and Millennial shoppers are remaining cautious as they carefully plan for festive spending.
According to a recent consumer behavior survey conducted by Qualtrics on behalf of Intuit Credit Karma, nearly a quarter of Americans wish the holidays were canceled this year because of the cost. Credit Karma’s experts said that with the cost of living on the rise and credit card debt reaching record highs, student loan payments are pushing consumers to the edge and note that 28 percent of Gen Z and Millennials cited student loan repayments when considering the unaffordability of holidays this year.
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Two-thirds of Gen Z and Millennials acknowledged that they will take on debt this holiday season.
As these young consumers organize their holiday budgets, many say they cannot afford to travel home for the holidays this year due to student loan repayments (32 percent of Gen Z and 25 percent of Millennials). Moreover, 42 percent of Gen Z respondents and 37 percent of Millennials say they “want to cry when they think about how much they will spend on holidays this year.”
Credit Karma’s report found that many of those wanting to take part in the holidays will make cuts across different areas including limiting their contributions to savings (26 percent), holiday decorations (23 percent) and hosting holiday parties (22 percent). Nearly one in five Gen Z respondents also told the company they would sacrifice necessities to afford the holidays.
In a similar report by American Express, which looked at holiday spending and holiday spirit of Gen Z and Millennial consumers over the age of 18 with an income of at least $50,000, young shoppers said they are embracing a season of travel, but likewise are being mindful when thinking of future plans. The company’s data shows that these consumers are looking to create memorable celebrations this winter and have been looking to social media and online communities to help set goals for 2024.
As experiences are prioritized, 72 percent of Gen Z and Millennial respondents told the company they would rather spend money on a trip to go away with friends or family for the holidays than purchase gifts. More than half reported feeling that they had not traveled enough over the summer and were looking to make up for it during the winter months. To make these travel goals a reality, 62 percent said they typically book holiday travel with credit card points or airline miles that they have earned over the year.
Nearly 75 percent of Millennial and Gen Z respondents agree they want memorable experiences more than gifts this holiday season. To get into the holiday spirit, 83 percent of Millennial and Gen Z respondents said they rewatch favorite holiday movies or TV shows. For 66 percent, this also means getting matching holiday clothing or pajamas with friends and family.
Top financial goals reported by Millennial and Gen Z respondents to Amex included growing savings (59 percent), paying off debt (42 percent), sticking to a budget (41 percent), building an emergency fund (33 percent) and planning to invest more or grow investments (29 percent).
Congruent with findings from Credit Karma and American Express, Affirm’s 2023 holiday survey revealed finances are top of mind for the consumer who is looking for promotions and sales to stay on budget. To help retailers and brands within its payment network understand how to engage shoppers’ priorities this holiday season amid economic concern, Affirm’s survey looked at 2,000 American consumers, asking how they plan to spend and what strategies they are taking.
Overall, Affirm’s findings showed that Americans are set to spend the same or more than last year and 64 percent are not complete with their holiday shopping. As they shop, 59 percent of respondents said that staying on or under budget is the top strategy for managing financial stress this season. For 64 percent, this means looking for interest-free promotions that allow payments over time and do not include late or hidden fees. Fifty-four percent reported they are also looking for discounts and sales.
As they spend, 70 percent of consumers said they will be purchasing gift cards and 72 percent said they will be purchasing physical gifts. Sixty-six percent also said they will be budgeting to spend on clothes and accessories for the holiday season, while 57 percent will spend on technology.
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