Holiday Shopping & Financial Planning 2024

This year, retail sales in the U.S. are expected to climb once again, with total sales for November and December 2024 projected to increase by a healthy 4.8 percent year-over-year, reaching a whopping $1.353 trillion. Even more notably, eCommerce sales are set to grow at nearly twice that rate, underscoring the continuing shift toward online shopping.

“With such high consumer activity expected, it’s more important than ever to get ahead of your holiday spending with careful financial planning. Whether you’re aiming to spread the cheer with thoughtful gifts or host the perfect holiday gathering, creating a budget and planning your spending can ensure that your 2024 holiday season is enjoyable without leaving you financially vulnerable,” says Darren Nomberg, Senior Vice President, Investments at David Lerner Associates, Inc.

How Much Are American Consumers Expected to Spend This Holiday Season?

The holiday season continues to be a major driver of consumer spending in the United States, and 2024 will be no different. As mentioned earlier, total retail sales for November and December are expected to reach a staggering $1.353 trillion. This rise reflects both the anticipated increase in foot traffic to brick-and-mortar stores and the continued boom in eCommerce.

Recent data from marketing technology company Vericast’s Holiday Retail TrendWatch shows that 41 percent of U.S. consumers plan to treat themselves to gifts this holiday season, even with tighter budgets. This trend is higher among Gen Z (47 percent) and Millennials (56 percent).

While many consumers want to splurge a little on gifts, decorations, and experiences, inflation and fluctuating economic conditions mean that shoppers should be more strategic with their spending. With that in mind, now is the perfect time to plan your holiday budget and get your finances in order before the shopping rush begins.

Preparing for a Condensed Holiday Shopping Period

One of the unique challenges of the 2024 holiday shopping season is the shortened timeline between Thanksgiving and Christmas. Consumers and retailers alike will need to adjust with only 27 days between these two major holidays. Marketers are expected to ramp up their holiday communications earlier in the year, in an attempt to capture consumer interest long before Thanksgiving rolls around.

The weeks leading up to Thanksgiving, the critical shopping days that follow, such as Black Friday and Cyber Monday, will be essential for both retailers and consumers. Many of the best deals are expected to surface during this period, so if you plan to make significant purchases or finish your holiday shopping early, it’s worth watching for early sales and discounts.

Retailers may also continue to heavily promote online sales, with many offering early online deals to entice shoppers to start checking off their lists well before the holiday rush. While this creates great opportunities for savings, it also increases the pressure to spend, so it’s essential to go into the season with a clear plan in mind.

Budgeting for Holiday Expenses

Before the holiday season begins in full swing, take some time to calculate your holiday costs. Planning ahead and creating a budget will help you enjoy the season without going into debt.

Here are three steps to help you prepare:

1. Look back at how much you spent last year: Start by looking at your spending from last year. How much did you spend on gifts, food, travel, and entertainment? This can help you establish a baseline for your 2024 holiday budget.
2. Plan Your Holiday Celebrations: Your holiday plans will influence your overall spending, whether you’re hosting family at your house, traveling to see loved ones, or keeping things more low-key. Determine you must allocate money for travel, hosting, or other activities.
3. Organize Your Gift Recipient List: Write down everyone you plan to give gifts to this year. Once you have a clear list, you can set specific budgets for each recipient. If you’re planning on purchasing multiple gifts, think about staggering your spending over several weeks to avoid overspending all at once.

Getting Your Finances in Shape for the Holidays

To help you get your finances the holidays, consider these five practical tips:

1. Set a Realistic Holiday Budget: Going all out during the holiday season is tempting, but it’s essential to set a spending limit. Look at your current financial situation and set a realistic budget for gifts, travel, and holiday meals. A general rule is to allocate no more than 1.5-2 percent of your annual income for holiday-related expenses. Stick to your budget by tracking your spending throughout the season.
2. Start Saving Early: The earlier you start saving for the holidays, the less financial stress you’ll experience when the season arrives. Consider setting up a dedicated holiday savings account or using apps that help you automate savings. Setting aside small amounts each week or month will build up a reserve to cover holiday expenses.
3. Leverage Discounts & Deals: Pay attention to early sales, special discounts, and promotional offers. Many retailers start their holiday sales well before Black Friday and Cyber Monday. Use price comparison tools and apps to ensure you get the best deals. Don’t forget to utilize loyalty programs, credit card rewards, and cash-back opportunities to maximize your savings.
4. Be Creative with Gifting: Being thoughtful doesn’t always have to mean being expensive. Consider homemade gifts, experiences, or personalized items for your loved ones. Often, these gifts are more meaningful and help you stay within your budget. For example, a handcrafted photo album or a special outing can be just as, if not more, appreciated than a pricey store-bought item.
5. Avoid Last-Minute Shopping: Last-minute shopping often leads to impulse purchases, which can quickly blow your budget. Plan ahead and make sure you’ve set aside time to shop in advance. Whether online or in-store, sticking to your list will prevent you from making unnecessary purchases. Plus, shopping early may help you avoid the stress of shipping delays or supply shortages.

Conclusion

The 2024 holiday shopping season is shaping up to be a busy one, and with so much excitement in the air, it’s easy to let your spending get out of control. By setting clear financial goals, creating a thoughtful budget, and sticking to your plan, you can enjoy a joyful and financially secure holiday season. Remember, the best gifts are not just the ones that are wrapped in paper; they’re also the ones that come with financial peace of mind.

At David Lerner Associates, we’re committed to helping you stay on track with your financial goals throughout the year. If you need help setting a holiday budget or want advice on incorporating holiday spending into your broader financial plan, we’re here for you.

Contact one of our knowledgeable representatives today, and let us help you create a strategy for financial preparation—not just for the holiday season, but for the years to come!

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Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.