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American holiday shoppers typically plan their buying a few months in advance. But even that preparation hasn’t prevented a lump of debt from arriving at the end of the year.
According to NerdWallet’s second Consumer Holiday Shopping Report, most American holiday shoppers  plan their shopping ahead of time, but many put off making purchases until after the bargain-rich period spanning Thanksgiving, Black Friday and Cyber Monday — and their wallets may suffer the consequences.
The report analyzes spending behavior and trends among millennials (ages 18-34), Gen Xers (35-54) and baby boomers (55 and older), and is based on a survey of more than 2,000 U.S. adults 18 and older commissioned by NerdWallet and conducted online by Harris Poll in October 2017. The report found that despite their good intentions, a higher percentage of Americans who shopped during the 2016 holiday season incurred debt than those who shopped during the 2015 holiday season.
Spending is expected to stay flat: Americans who will purchase holiday gifts during the 2017 holiday season plan to spend $660 on average, about the same as in 2016 ($657), and 60% of those who plan to purchase gifts in 2017 say they will spend the same as last year.
More Americans are finding themselves in debt as a result of holiday gift purchases: 56% of those who shopped during the 2016 holiday season incurred credit card debt versus 48% of those who shopped during the 2015 holiday season.
Baby boomers who plan to shop this holiday season plan to spend the most: They estimate their spending at $802 on average. Millennials and Gen Xers follow at $434 and $679, respectively.
Budgets are often overlooked: More than a quarter of Americans (27%) who shopped during the 2016 holiday season did not have a budget, and 24% went over budget.
Americans prepare for months: On average, holiday shoppers typically start to plan their shopping 2½ months in advance.
But they may be missing out on some of the shopping season’s best sales: 47% of those who plan to purchase gifts say they’ll do the majority of their shopping between Nov. 28 and Dec. 23, not on Thanksgiving, Black Friday or Cyber Monday.
Most intend to mimic 2016 spending
An overwhelming majority of shoppers (85%) plan to purchase gifts for friends and loved ones between now and the end of 2017, and when it comes to spending money, most don’t intend to deviate from last year — 60% of those who plan to purchase gifts during the 2017 holiday season say they will spend the same amount as they did in 2016 (anticipated spending of $660 on average this year versus $657 last holiday season).
Within that group, baby boomers plan to spend the most money on average at $802, which is 85% more than millennials ($434) and 18% more than Gen Xers ($679).
Millennials are far more likely (34%) to say they will spend more this year than last year compared with Gen Xers (15%) or baby boomers (13%). Still, as in 2016, millennials who plan on purchasing gifts in 2017 were more inclined to say they will spend less than $500 (63%), while 45% of Gen Xers and 46% of baby boomers said the same.
Debt is a growing side effect of holiday shopping
Taking on debt to pay for gifts is becoming more common. More people who shopped during the 2016 holiday season say they incurred credit card debt (56%) than those who shopped during the 2015 holiday season (48%). Despite the increase, shoppers say they’re paying it off sooner — 44% of those who incurred debt in 2016 paid it off with the first statement, versus 39% in 2015.
“There’s this myth that planning ahead and budgeting always ensures you don’t overspend. But in reality, creating and even sticking to a budget won’t make you immune to holiday debt,” says NerdWallet consumer savings expert Courtney Jespersen. “It’s so important to set a realistic ceiling for your spending.”
Baby boomers were the most likely to accumulate debt (63%) among those who shopped during the 2016 holiday season, compared with 58% of Gen Xers and 40% of millennials. Of those who incurred holiday shopping debt in 2016, however, millennials and Gen Xers are more likely than baby boomers to still have it — nearly a quarter of millennials (24%) and 16% of Gen Xers have yet to pay theirs off, compared with just 8% of baby boomers.
7 in 10 make a plan for their holiday
Most holiday shoppers create a game plan early on — 7 in 10 say they typically plan their shopping in advance. On average, those forward-thinking consumers start planning 2½ months ahead.
But early planning doesn’t always translate to early shopping: Only 6% of those who plan to purchase gifts say they have already done the majority of their holiday shopping this year, and 17% say they will likely shop at the last minute.
Across the generations, millennials are the most likely group of holiday shoppers to get a head start — more than a quarter (27%) say they plan to shop between now and Thanksgiving, compared with 20% of Gen Xers and 18% of baby boomers. Millennials also anticipate that they’ll reduce their shopping time this year: In 2016, 61% of those who planned to shop on Thanksgiving, Black Friday and/or Cyber Monday planned to spend five hours or less on the task, compared with 67% in 2017.
Gift purchases are set to pick up after Cyber Monday
Thanksgiving, Black Friday and Cyber Monday attract a lot of attention but won’t necessarily be the most popular days for shoppers to buy presents for friends and loved ones. Of those who propose to shop in 2017, 51% say they plan to make at least some gift purchases this upcoming Thanksgiving, Black Friday or Cyber Monday, planning to spend an average of $352 on these major sale days combined. About one quarter (24%) say they plan to spend $500 or more.
Overall, when will most spending occur? The bulk of those who plan to purchase gifts (47%) anticipate that they’ll do the majority of their shopping between Nov. 28 and Dec. 23.
“Shoppers naturally get in the holiday mindset during the month of December, but they could be making a mistake if they reserve the majority of their gift-buying for later in the season,” Jespersen says. “They’ll be missing out on some of the season’s biggest deals on Black Friday and Cyber Monday.”
Millennials find resourceful ways to earn shopping money
Of those who plan to purchase gifts this holiday season, nearly 1 in 4 (24%) plan to use a percentage of their savings, and about 1 in 10 (9%) say they’ll use their year-end bonuses.
Some millennials are seeking alternative methods to fund their holiday shopping, more so than the other generations — 17% of millennials who plan to purchase gifts this year intend to get a side gig to make extra money, like driving for a ride-sharing company or waiting tables, versus just 7% of Gen Xers and 2% of baby boomers.
“Millennials are known for doing things their own way, and holiday shopping is certainly no exception,” Jespersen says. While 11% of millennials who will shop this year plan to sell personal belongings like clothing or electronics, only 5% of Gen Xers and 2% of baby boomers expect to do the same.
Budgeting results are mixed
Many shoppers hit the mark with their spending last year. More than 2 in 5 of those who purchased gifts during the 2016 holiday season (44%) say they stuck to their budgets. However, nearly a quarter (24%) spent more than their budget and another 27% say they did not have a budget.
Millennials (49%) were more likely to stick to their 2016 holiday shopping budgets, compared with 40% of Gen Xers.
Ways to improve your shopping strategy
While holiday shopping leads to debt for many people, you don’t have to be among them. Keep your spending on track with NerdWallet, where you can see a single view of your finances and set savings goals. These tips can help you prepare for holiday purchases.
Set a firm (and realistic) budget: Having a plan won’t help, no matter how early you make it, if it’s not doable. Set a gift budget that you can afford given your income and other expenses, and track your spending against it. In the often-recommended 50/30/20 budget, gift purchases fall into the "wants" category and should not exceed 30% of your monthly income.
Scope out the sales: Timing your purchases right will leave more money in your pocket. Start monitoring and comparing prices early — Thanksgiving, Black Friday and Cyber Monday often feature some of the season’s biggest discounts.
Get serious about credit card debt: If you do find yourself in debt, make paying it down a priority. Carrying a balance for an extended period can ding your credit score and cost you more in interest charges.
The 2017 survey was conducted online within the United States by Harris Poll on behalf of NerdWallet from Oct. 12-15, 2017, among 2,135 U.S. adults ages 18 and older, among whom 452 are millennials (18-34), 736 are Gen Xers (35-54) and 947 are baby boomers (55+). The 2016 survey was conducted online within the United States by Harris Poll on behalf of NerdWallet from Sept. 20-22, 2016, among 2,036 U.S. adults ages 18 and older, among whom 462 are millennials (18-34), 667 are Gen Xers (35-54) and 907 are baby boomers (55+). These online surveys are not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact: [email protected].
 American holiday shoppers is defined as those who have ever shopped during the holiday season.