How Much Money Does the Average Family Plan to Spend on Christmas Gifts in 2011?

November 30, 2011

 

Christmas gifts.

Image via Wikipedia

It is imperative to remind people that Christmas is not about money and presents. Still, just because Christmas is not about money and presents, doesn’t mean that you take a pass at watching your finances when buying presents this year. In fact, data about average family spending during the holidays reveals some interesting details about the purchasing psyche of average Christmas present shopper.

 

What Does the Average Family Spend on Christmas Presents?

According to surveys from the American Research Group with regards to Christmas gift spending, the average family plans to spend $646 this Christmas shopping season. This spending is down from $658 last year, but above the ten year low of $417 in 2009. Over the last ten years, the highest reported spending was in 2001 with $1,052.

When compared to the average family budget, the Christmas gift budget makes up 1.3% of all average family spending. It is more than what the average family will spend on reading materials ($110/year) and alcoholic beverages ($435/year) put together.

However, details of this survey provide some very interesting information about when and how to plan your family’s spending for Christmas presents.

Early Shoppers Spend 14% More than Average

The survey showed that those who had started Christmas shopping by November 20th or earlier were planning on spending nearly 14% more than the average Christmas shopper. 39% of all Christmas shoppers had started by this time frame and reported a budget of $734 compared to the average of $646.

Shoppers Paying Full Price Spend Less than Those Only Buying on Sale

Believe it or not, 16% of shoppers are not looking for any holiday sales and instead plan on paying full price. Crazy? Well those paying full price reported budgets of $751 or $10 below those who are only going to buy gifts when they are on sale; a group that has an average budget of $761.

So why do 16% of shoppers, who are paying full price, plan on spending less than the 53% of shoppers waiting for sales? Perhaps, it has to with the psychology of sales? I’m talking about how lower prices leads to more total purchases and more overall spending. There is a reason retailers discount heavily for the holidays and it isn’t because they plan on losing money this year. They are trying to get you to buy more and it is being reflected in how shoppers plan their budgets.

Those Buying on the Internet Plan to Spend 11% More than Average

This one piggybacks the “buy only on sale” shopper category nicely. The internet is supposed to be the place where everything is immensely cheaper. Yet according to the survey, the 37% of Christmas shoppers who plan to use the internet are estimating spending budgets of $714. It is better than the planned $808 from those who are going to buy from catalogs, but still more than average and I believe that the allure of deals is the leading culprit for why  people to purchase more than average.

Who Spends Less than the Average Family?

Interestingly, the survey only found two groups of shoppers planning on spending less than the average Christmas shopper.

The first was the 61% if people who had yet to start shopping by November 20th. Those in this group reported an average budget of $591 or 9% below the average shopper. Procrastination is usually a bad trait, but when it comes to Christmas shopping, I guess the early bird gets the worm, but has a bigger bill.

The second group was the 31% of shoppers who said that would vary buying on sale or paying full price based on the gift they were buying. These Christmas shoppers had a budget of $396 or 39% below the average. Another way to look at it is that choosy shoppers will spend at least 47% less than those paying full price and those that are sales hounds.

When it comes to holiday shopping your budget is better off if you are patient and remain flexible on your purchases; not rushing into sales or paying full price. If this is your mindset going in, your Christmas budget is likely to be smaller.

How does your spending compare to the average family? Do you find that sale shopping, shopping online or shopping early affects your budget?

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20 Responses to How Much Money Does the Average Family Plan to Spend on Christmas Gifts in 2011?

  1. YFS on November 30, 2011 at 10:45 pm

    Wow.. my family blows the average spent on Christmas amount out of the water! Also, thank you for adding me

    • Shaun on December 1, 2011 at 1:34 am

      You have great content, so naturally, I must link! :)

      Blow the average spent in which direction? This year I hope to be way under.

  2. Jeremy @ Personal Finance Whiz on November 30, 2011 at 11:02 pm

    Thanks for the mention Shaun!

    We must be thinking along the same wavelengths. I’m working on a post right now about gift giving without blowing your budget. In it I use that survey from the American Research Group as well.

    • Shaun on December 1, 2011 at 1:31 am

      There ought to be a way you and I can exploit our penchant for writing about the same data. If you figure something out, let me know, because I’d love to do something co-op sometime.

      I can’t wait to read your take on the survey.

  3. MLISunderstanding on November 30, 2011 at 11:11 pm

    Y’know, it doesn’t mention what the savers and spenders got for their money. If the number and quality of gifts are equal, then it would seem that the sale-shoppers got a bad deal, and that the last-minute rush wins. But I shopped online sales early this year — my gift list is all ticked off — and I spent about $350 on 20 gifts. I’m thinking that an unplanned rush on December 22nd would either have netted me far less or cost me far more, for a lot more stress.

    • Shaun on December 1, 2011 at 1:29 am

      I too thought that the findings in this instant were counter intuitive, but it is important to think of the study in terms of the average person. I’d be willing to bet your personal strategy and goals are far more conservative compare to the average Christmas shopper. When you consider the fact that the average person is just looking for an excuse to shop and not good deal on a pre-planned list.

      For the shopper in control of their spending, I can’t see how your strategy isn’t the best way to hit the present buying scene.

      On the other hand, the fact that the “average” shopper buys more when they start early really could explain why black Friday is getting earlier and earlier each year.

      BTW, are you familiar with LC’s Adventure’s in Library Land? http://lcsadventuresinlibraryland.blogspot.com/
      It’s a friend’s blog. I thought you might be interested since you are both aspiring librarians.

      • MLISunderstanding on December 1, 2011 at 1:49 am

        Yes, the temptation to keep shopping even if you’ve finished up early is strong! I keep an eye out for charitable opportunities (like the excellent Groupon that went up yesterday and quickly sold out: http://www.groupon.com/deals/gx-gt-donorschooseorg) during the rest of the season, since that’s already part of my budget, and it gives me the same warm-and-fuzzy feeling without resorting to extra stocking stuffers. :)

        Thanks for the recommendation — LC’s blog is so pretty! Adding it to my feed reader for inspiration on my 100-book challenge next year.

        • Shaun on December 1, 2011 at 2:16 am

          You are really on top of things. I haven’t even set a budget limit yet.

          I love your idea about the charitable giving deals during the shopping season.

  4. Hank on December 1, 2011 at 1:50 am

    Wow! That is so interesting to see that those who start early and shop on the internet spend more than the average. I wonder if I can save a bundle and come in way below average if I simply wait to the last minute. Great post!

    • Shaun on December 1, 2011 at 2:19 am

      Thanks Hank. The best I could figure was that perhaps the starting early is more of an indication of impulse; not being able to wait to Christmas shop and not “looking for the best deals early” kind of mindset. Or maybe, since they are starting early, they shop longer? Unfortunately, the study does not parse it out for us.

  5. [...]  on average shoppers plan to spend $646 this year on gifts for the holiday season. (Check out Smart Family Finance’s post on this for a great breakdown of the [...]

  6. [...] Family Finance: How Much Money Does the Average Family Plan to Spend on Christmas Gifts in 2011 – Most of us will spend money buying friends and family gifts this Christmas. Information [...]

  7. [...] Smart Family Finance Roundup [...]

  8. Jen McDonough on December 11, 2011 at 5:59 pm

    Just wanted to say I came across your blog and really enjoyed it!!!
    Thank you for sharing.
    Blessings,
    Jen
    http://www.fieldofdebt.com

    • Shaun on December 13, 2011 at 11:37 am

      Thanks for saying hello and stopping by.

  9. [...] presents How Much Money Does the Average Family Plan to Spend on Christmas Gifts in 2011? posted at Smart Family Finance, saying, “Most of us will be purchasing gifts this year for [...]

  10. SB @ One Cent At A Time on December 19, 2011 at 2:28 pm

    Thanks for the link Shaun!

    • Shaun on December 20, 2011 at 1:35 am

      Anytime SB. It has been too long since I’d linked one of your excellent posts.

  11. [...] your Christmas gifts should be avoided. Grabbing my financial calculator – paying off the average family Christmas budget of $646, over the next 12 months, at a 20% interest rate; adds about 11% to your total [...]

  12. [...] day and compare who got the better presents. “When compared to the average family budget, the Christmas gift budget makes up 1.3% of all average family spending. It is more than what the average family will spend on [...]

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