With last year’s holiday spending having increased 14.1 percent to a record $886.7 billion, the personal-finance website WalletHub has released its 2022 Holiday Budgets by City report, as well as accompanying videos and expert commentary.
To help consumers avoid post-holiday regret, WalletHub used several key metrics, such as income, age and savings-to-monthly expenses ratio, to estimate the maximum spending amounts for consumers in over 550 U.S. cities.
The following are some highlights from the report:
Cities with the Biggest Holiday Budgets
Newton, Massachusetts came in at number one, with an estimated budget of $4,233. Next, at number two, came Palo Alto, CA ($3,920) followed by Flower Mound, TX ($3,531), third; Milpitas, CA ($3,480); Bellevue, WA ($3,401); Mountain View, CA ($3,258); Sunnyvale, CA ($3,237); Santa Clara, CA ($3,224); Ellicott City, MD ($3,122) and, rounding out the top ten, Fishers, IN ($2,969).
Taking spots 11 through 20 were: Naperville, IL ($2,969) at number 11 followed by Weston, FL ($2,955); Cary, NC ($2,916); Cedar Park, TX ($2,855); Sugar Land, TX ($2,793); Maple Grove, MN ($2,707); Allen, TX ($2,670); Roswell, GA ($2,598); Rockville, MD ($2,574); and at number 20, League City, TX ($2,541).
Key Stats
• Newton, Massachusetts has the lowest expenses-to-income ratio, 58.25 percent, which is 1.7 times lower than in Hartford, Connecticut the city with the highest at 99.16 percent.
• Sioux Falls, South Dakota, has the highest savings-to-monthly expenses ratio, 646.80 percent, which is 3.5 times higher than in Hartford City, Connecticut the city with the lowest at 185.24 percent.
To view the full report, visit: https://wallethub.com/edu/holiday-budgets-by-city/16912
Expert Commentary
What tips do you have to help people avoid holiday overspending?
“A budget can really help to control holiday spending. Want to buy things cheaply? Plan ahead. Today, the day after Halloween is the best day to buy Halloween merchandise at lower prices. The day after Christmas is the best day to buy Christmas merchandise at cheap prices. Some products can be bought off-season and at more affordable prices. Budgeting a certain amount for a given holiday is the best way to control expenses. Forego credit card spending and start spending cash for holidays. Thus, you cannot overspend. Set up spending limits on your credit card and once you cross that threshold, your credit card will send you notifications. Plan what to buy and stick to the list. These are some ways in which holiday spending can be controlled.”
Sampath K Kumar, Ph.D. – Professor; Academic Director: MS - Data Sciences, University of Wisconsin - Green Bay
“Most spending elicits two types of emotion – the joy/thrill as you spend, and (often) the regret the day after that you have spent too much. If you think that you are likely to overspend, train yourself to anticipate the day-after emotion today, i.e., ask yourself as you are buying, how would I feel the day after, a week after? Anticipating that you will regret your purchases in the future just might do the trick.”
Subimal Chatterjee – Area Chair Analytics (Marketing, MIS, Operations/SCM), SUNY Distinguished Teaching Professor – Binghamton University
How do you think the current social and economic environment is influencing household holiday spending decisions?
“The positive is that most of the restrictions due to COVID have been eliminated. People are feeling good and looking forward to the holidays. Families and friends are looking forward to celebrating the holidays with each other This should have a positive effect on both holiday travel and spending on gifts. On the negative side prices for energy, rent, groceries, autos, travel, and most items that we purchase are higher. This will moderate the spending, causing consumers to be price conscious looking for sales, and making price comparisons.”
John T. Bowen, Ph.D. – Professor Emeritus; Former Dean and Barron Hilton Distinguished Chair, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston
“I personally think people will spend more money this holiday season even while they may be having economic anxiety. People are still coming out of the COVID-19 epidemic and feel the need to return to normal. ‘Normal’ during the holidays is meeting with people and exchanging gifts. Also, the supply chain problems of last year will make people want to make up for what they could not get last year. A major part of economic anxiety today is caused by media messages. While their personal economic situation may be okay, people are constantly told that the economy is bad, so it must be.”
Bill Hauser, Ph.D. – Applied Sociologist and Associate Professor Emeritus, University of Akron
How can people show love and appreciation over the holidays without spending money on gifts?
“We often say this (but never seem to practice it) – it is the thought that counts. So, you might have a friend who has been putting off work to be done at their house because time and/or money are tight. Just turn up one day, and say let’s get that done together. It can be as simple as mowing your friend’s lawn. We make the mistake of thinking that we can always pay someone else to do my friend the favor – That is the mistake – when you do the work yourself, you show your true love and appreciation.”
Subimal Chatterjee – Area Chair Analytics (Marketing, MIS, Operations/SCM), SUNY Distinguished Teaching Professor – Binghamton University
“A great way to show love and appreciation is to use your talents. If you have a skill such as baking, canning, pottery, painting, woodworking, or knitting, a gift you make for someone can have a special meaning. For example, the scarf you gave as a gift will bring back memories of you each time the recipient of the gift wears it. A personalized gift you make can show more love and appreciation than a gift that you purchase. A handwritten note or a phone call is another way of showing your love and appreciation.”
John T. Bowen, Ph.D. – Professor Emeritus; Former Dean and Barron Hilton Distinguished Chair, Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston
