Post-Covid Holiday Spending
Post-Covid Holiday Spending
Despite covid variants causing some hesitance for many Americans and their holiday planning, retailers can look forward to an uptick in holiday shopping this year. According to Deloitte, U.S. consumers will likely spend up to 9 percent more this holiday period compared to 2020, when consumers spent a total of $1.2 trillion during the key shopping period between November and the end of the year. That would be an improvement over holiday spending over the last two years when sales grew less than 6 percent in 2020 and just over 4 percent the previous year.
And while office parties and Thanksgiving gatherings that were put on hold last year might be back on the calendar in 2021, retailers are hoping for a successful Black Friday to boost the economy. Last year, consumers spent $9 billion on the web the day after Thanksgiving, up 21.6 percent year over year, according to data from Adobe Analytics. This trend may continue in 2021, and combined with shoppers being out and about in malls and other retail areas, the hope is that the spending spike continues to rise.
Last year saw the travel and tourism industries take a major hit, and holiday travel this year will likely be closer to 2019 levels. Holiday travelers who are staying in the U.S. this year certainly aren’t clutching their purses. Domestic travelers have increased their trip spending by an average of 46 percent this year compared to just two years ago.
After a 2020 spending surge, the trip costs insured for international trips in 2021 are about 10 percent above pre-pandemic spending in 2019. The average trip cost for a vacation abroad is now close to $5,800.
Richard Eden, Senior Vice President Retirement Planning at David Lerner Associates says, “Tempting though it may be to splash out on some holiday travel deals, without a responsible monitoring of your spending and credit card activity, there are some costly missteps that can be made.” And even with the holiday spirit in full swing, it’s still a good idea to make smart money decisions, like keeping a holiday spending budget, for instance.
So while attractive deals are being advertised all over the place, keep in mind that if you go in for any large purchases, especially those offering zero-interest payments, the entire amount has to be paid off before the end of the advertised “zero interest” period. Even if you only owe one penny at the end of that time, you will be charged the full interest for the whole introductory period.
Another thing to keep a close eye on is scams and online digital crime. We need to be especially careful of cyber thieves looking to take advantage of this spike in credit card usage during the holidays. There have been escalated reports of fraudulent online stores and fake shopping apps being created, just waiting for people to find them and type in their credit card information. So be sure to verify the source before handing over your information.
Here are some additional tips to stay financially safe this holiday:
• Implement a dual-control process for the approval of payments or requests for changes to payment information.
• Avoid clicking on links in unsolicited emails and be wary of email attachments.
• Be especially wary if a company asks you to update your password or account information. Look up the company's phone number on your own and call the company.
• Install and maintain the most up-to-date anti-virus software, firewalls, and email filters.
• Always use caution when making any sort of online payment transaction.
• Fraudsters also prey on the increased focus on giving during the holidays, so be mindful of criminals sending spoofed emails requesting support for fraudulent charities or causes.
IMPORTANT DISCLOSURES
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 Associ-ates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
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.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances.
Member FINRA & SIPC.