Inflation replaces pandemic as biggest holiday spending stressor, survey says

Inflation has replaced the pandemic as the top reason influencing how consumers spend money this holiday season, a recent Morning Consult survey said. 

Ninety percent of U.S. adults said they are "very" or "somewhat" concerned about inflation, the survey said. A third of U.S. adults (34%) said that giving a gift would put a strain on their finances, according to a separate Morning Consult survey. 

"Consumers feel worse off now than at this time last year as they grapple with high inflation," the report said. "The holidays are expected to make this feeling worse, especially prevalent among those who traditionally have lower financial well-being — namely women, millennials and lower income households."

Keep reading to learn about how you can budget for holiday spending. If you're interested in financing options for larger purchases, you can visit Credible to compare interest rates on a variety of financial products without impacting your credit score.

INFLATION LEADS MORE AMERICANS TO LIVE PAYCHECK-TO-PAYCHECK: SURVEY

Buy now, pay later use is growing amid inflation

Almost 30% of U.S. adults are considering using a buy now, pay later (BNPL) service to cover large purchases this holiday season, compared with 18% of adults who plan to open a new credit card for the same reason.

BNPL providers partner with retailers to allow shoppers the ability to split the cost of their online purchases into multiple installments at checkout. Installment payments typically begin within a few weeks of the purchase and appeal to many shoppers because they are often interest-free.

The number of consumers who said they would use BNPL this year represents a "sizable jump" from last year, when just 20% and 23% of U.S. adults reported using BNPL in November and December, respectively, according to the report. 

"To cover holiday expenses, consumers are more likely to consider using BNPL services than to open a new credit card, as rising interest rates on credit cards make the BNPL loans, which often have no interest, especially enticing," the report said. 

If you're planning to borrow money this holiday season, you may want to consider a 0% APR credit card or a personal loan for larger purchases. You can visit Credible to compare multiple rates and lenders for free, all in one place.

DIGITAL MORTGAGES TO ENTER A NEW, FASTER (AND CHEAPER) ERA IN YEAR AHEAD

Here's how shoppers are budgeting for holiday spending

Despite inflation and rising costs, 45% of respondents said they planned to spend the same on gifts this year as they did last year. Here's how consumers are planning for the extra holiday spending costs:

More shoppers have started saving earlier  

Over half of the respondents (51%) said they started budgeting earlier for the 2022 holiday season because of inflation and rising costs compared to 45% in 2021. As a result, only 15% of consumers said they are likely to get into debt this year, compared to 25% in 2021.  

Shopping for deals is a top priority  

The majority of respondents (84%) said sales and promotions are a priority when making gifting decisions. 

Cut down on other expenses

Many respondents (67%) said they planned to spend less on their everyday needs ahead of the holidays.

Another way you could save on your monthly bills is to take out a debt consolidation loan to help pay off existing debt at a lower interest rate. You can visit Credible to compare debt consolidation loan options and find your personalized interest rate without affecting your credit score.

MAJORITY OF AMERICANS FEAR A RECESSION IS COMING, SURVEY SAYS

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.