Welcome to Extreme Investor Network!
As we head into the holiday season, many Americans are facing financial challenges when it comes to holiday spending. According to a recent survey by Morning Consult, only 52% of shoppers with incomes of $100,000 or more feel they can easily afford holiday expenses in 2024. This group is the most confident compared to other income groups, as only 33% of those earning $50,000 to $99,900 and 18% of those earning below $50,000 annually feel they can sustain the costs.
The lack of confidence in holiday spending stems from households still struggling with inflation, which can disproportionately affect lower-income individuals. Inflation is like a regressive tax, hurting lower-income people more than higher-income people because it takes a larger chunk of their wallet.
If spending cash on holiday purchases this year seems like a stretch for your budget, you’re not alone. About 20% of Americans surveyed said they will have to go into debt to pay for holiday celebrations and obligations. It’s important to note that credit card balances can be very sticky, with about 28% of 2023 holiday shoppers still paying off debt from almost a year ago. Credit cards charge high interest rates, with the average APR for credit cards around 20.50% and even higher for retail credit cards at 30.45%.
High-earning households have more flexibility in their budgets, as the labor market was favorable for workers and many had saved Covid-19 stimulus payments. These households were less affected by inflation compared to lower-income households. About 68% of respondents who earn $100,000 or more said they can cover three months or more of basic expenses without income, giving them the strength to spend on retail purchases and travel this holiday season.
At Extreme Investor Network, we understand the importance of personal finance and making informed decisions when it comes to managing your money. Stay tuned for more tips and insights on how to make the most of your finances and investments!