Rising energy costs dampen holiday spending intentions

In citing influences over their holiday spending plans, 38 percent of those responding said the cost of gasoline and home heating would cause them to somewhat or greatly decrease their holiday spending. Last year, only 32 percent said energy costs would influence them to reduce their spending.

The cost of gifts also is playing a role in consumer attitudes toward spending, with 32 percent saying they would somewhat or greatly decrease their spending as a result. That number was up from 26 percent last year.

Other factors, such as current family finances and general household expenses each were cited by 30 percent of survey respondents as affecting holiday spending.

“It is noteworthy how frequently consumers cited rising energy costs as a reason they plan to cut back their holiday spending, far more frequently than they cited general family finances,” said CUNA Chief Economist Bill Hampel, in a news release. “They are clearly quite concerned about the escalating price of gasoline and home heating oil.”

The CFA/CUNA survey was conducted earlier this month among more than 1,000 representative U.S. adults by Opinion Research Corp. The survey’s margin of error is plus or minus 3 percentage points.

In the survey, 35 percent of respondents said that they intended to spend less on holiday shopping than they did last year. This percentage was the highest in the eight years CFA and CUNA have surveyed holiday spending and up from 32 percent last year.

On the other hand, 15 percent said they planned to increase spending.

Tips for Smart Holiday Shopping

CUNA and CFA suggest the following tips to avoid deep debt during the holidays without sacrificing holiday quality.

• Make a budget and a list. Decide how much you can afford to spend, and stay within that budget. This will be easier if you also make a price list for all gift and other holiday items you plan to buy, such as holiday foods, party clothes, décor and postage.

• Comparison shop. You can easily save more than 10 percent on most items, and sometimes more, by comparing prices at different stores and online. Be careful, however, when shopping online, to make sure you are buying from a secure site.

• You’re less likely to overdo it if you pay in cash.

• Pay debts off quickly. If you must make holiday purchases using credit, use a lower-interest card and pay off this debt as soon as possible early next year.

• Don’t borrow more than you can repay in several months.

• Plan ahead. Open a Christmas Club savings account for next year. While these accounts do not pay much, if any, interest, they provide a practical way to save small amounts over time. Ask your credit union or bank to automatically transfer funds from your checking to your Christmas Club account every month. The discipline of saving reinforces your good budget intentions.

• Pay attention to return rules. Some stores are tightening their policies on returns. Keep receipts and note time limits, restocking fees and other factors that may affect the recipient.[[In-content Ad]]