With the expensive holiday shopping season coming up and holiday spending expected to reach more than $980 billion, the personal-finance website WalletHub today released its
2024 Holiday Budgets by City report, as well as expert commentary. It also released a free tool that calculates personalized holiday budgets for all
WalletHub members between now and Dec. 25.
To help consumers avoid post-holiday regret, WalletHub used several key metrics, such as income, age, and saving-to-expense ratios, to estimate the maximum spending amounts for consumers in over 550 U.S. cities.
Average Consumer Profile of Baltimore:
- Overall Rank for Baltimore: 342nd
- Monthly Income: $4,965
- Monthly Expenses: $4,046
- Savings: $8,341
- Age: 36.5
- Monthly Income-to-Monthly Expenses Ratio: 1.23
- Savings-to-Monthly Expenses Ratio: 2.06
Baltimore’s Average Holiday Budget for 2024: $1,110
For the full report, please visit:
https://wallethub.com/edu/holiday-budgets-by-city/16912
Key takeaways and WalletHub commentary are included below in text and video format.
“Depending on the city, an American’s holiday budget this year can range anywhere from just over $200 to more than $4,000, taking into account residents’ income, their existing debt obligations and the cost of living. Regardless of how well-off you are this season, it’s important to stick to a budget that fits your financial profile so you don’t rack up unsustainable debt and end up in a bad position after the holidays. There are plenty of ways to enjoy the holidays and show you care without spending much money, like hosting potlucks or giving handmade gifts.”
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“Newton, MA, has the highest average holiday budget, both among small cities and overall, at $4,206. Sunnyvale, CA, has the highest holiday budget among medium-sized cities and the second-highest among all the cities in our study, at $3,845 on average. Finally, San Jose has the highest holiday budget among large cities, at $2,828 on average, though it only ranks as the 27th-highest among all the cities in our study.”
– Chip Lupo, WalletHub Analyst
Expert Commentary
What tips do you have to help people avoid holiday overspending?
“Write down a list of items you are thinking of. classify them into 3 buckets. (1) You need them; (2) You want them; or (3) You find those items interesting. Stick to this list and focus on items on #1. If you have not exceeded your budget, get a few items on #2.”
Christopher S. Tang – Distinguished Professor; Chair in Business Administration, University of California, Los Angeles
“Make a list of gifts you need to buy and how much you can reasonably afford to spend on each item and stick to it. Do not be misled by discounts and sales that may cause you to spend more than you should and buy things you don’t need. Avoid impulse shopping and emotional online purchases that are not on your list. Track what you are spending as you make purchases to be sure you are not overspending. Paying with cash rather than credit cards makes spending more real, and you are less likely to overspend.”
Michael Moody, Ph.D. – Instructor, Department of Retailing, University of South Carolina
How can people show love and appreciation over the holidays without spending money on gifts?
“Holiday traditions can be a great way to show love and appreciation over the holidays without spending money on gifts. Baking cookies and sending them to relatives or friends with a thoughtful note allows families to share their own traditions with others.”
Amber M. Epp – Associate Professor, University of Wisconsin – Madison
“One way of showing love and appreciation is through experiences such as neighborhood gatherings, movie nights for kids with their friends, game nights with friends, all using festive holiday decorations and refreshments. Rather than spending on expensive electronics, smart shopping might include redecorating a kid’s room. Homemade items, cookies, candy and IOUs for services such as lawn mowing or car washes that kids can do can be thoughtful gifts. Sending handwritten cards adds a personal touch and comes across as more sincere. Holiday travel to be with family can be rewarding and memorable. Volunteering your time to a cause you are passionate about is a very rewarding experience during the holidays!”
Michael Moody, Ph.D. – Instructor, Department of Retailing, University of South Carolina
How do you think the current social and economic environment is influencing household holiday spending decisions?
“We live in a hyper-reality world. We are bombarded by ads and messages from the time we wake up till we go to sleep. Commercial breaks, banner ads, pop up ads, billboards, product placement within the media – it is sometimes harder to avoid retail offerings than it is to find them. With algorithms keeping ads individualized and relevant, it is easy for consumers to stumble across things they never knew they needed. This reality, plus increasing prices and social and emotional pressures, make it extra challenging for consumers to stay on budget around the holidays.”
Dr. Altaf Merchant – Dean and Professor of Marketing, University of Washington Tacoma & Dan Wickens – Certified Public Accountant, alum of University of Washington Tacoma
“Even though some households are feeling pressured, forecasts predict that Americans will spend more this holiday season. Inflation will impact some budgets, causing these consumers to spend more carefully. Unemployment, however, is the lowest it has been in recent years, and real wage growth has outpaced inflation. People tend to be in a happy mood during the holidays, and while they may spend more selectively, most people will still buy gifts. For some people spending and buying gifts is a self-esteem matter – giving makes them feel good. The National Retail Federation predicts online shopping will be a primary driver of holiday shopping. Some retail areas that were impacted by hurricanes, particularly in North Carolina and Florida, may see holiday shopping affected as locals may need to spend on essentials, and some stores may not be up and running.”
Michael Moody, Ph.D. – Instructor, Department of Retailing, University of South Carolina
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