American Debt - The Co$t Of Chri$tmas
When the three wise men traveled to see the new born king, the fact that they traveled via camel carrying gifts of frankincense and myrrh, they didn't run up massive air fare costs, nor go into debt to bring Christ anointed oils. Although, the Christmas season promotes a sense of warm heartedness, that of a spirit of piety, caring and sharing, Christmas is also the most expensive holiday of the year. Thanksgiving, a formality that is nearly becoming an afterthought is but a calm before the holiday shopping storm. The day after Halloween, many stores began their early decorations and holiday shopping campaigns. Santa comes bearing gifts, but he also comes with a hefty price tag.
According to a personal finance website, Magnify-Money, American shoppers accrued an average of $1,054 of debt due to holiday shopping in 2018. It also revealed that 5% of shoppers accumulated more than $5,000 in holiday debt. Of those that were surveyed, only half said that they would be able to pay off holiday debt in 3 months. Those remaining said that they would need at least five months or more to pay off holiday debts,. Purchases made on credit cards would take even longer. Ten percent of those polled said that they would be able to make the minimum monthly payments. On
average, those who used credit cards to accumulate the $1,054 holiday debt, if they paid a minimum monthly payment of $25 (average interest rate of 15.9%), they would be still paying on it until 2023. Making late payments or missed payments will accumulate fine and fees thus taking longer to pay off. In 2017, Americans set the record worldwide for having the largest amounts of credit card debt. Currently, US credit card debt is at $1.021 trillion according to magnify-money.
According to a recent November 2019 poll, of the 2,500 people polled by creditcard.com, 61% said that while still paying on previous year's holiday debt, they didn't mind accumulating more current holiday debt. The rationale behind it was that for those who had small children, they wanted the holidays to be memorable. Also some wanted to make a significant other or spouse happy with gift giving. In other words, the memories were priceless therefore the debt amassed was worth it. There is some truth to this.
When you look at American pop culture, in order to experience what the culture promotes as the ideal Christmas experience, it takes wealth and quite a bit of it. Iconic movies such as a Christmas Story, Home Alone, and a few other cinematic staples of holiday themes, you always see rather wealthy or semi-wealthy families. Take for
example Home Alone. Here you had a massive family living under one roof and had all of the things that American capitalism says that a family should have, well at least suburban families. It was a very large Georgian-Colonial style red brick home with an interior right out of a Better Homes and Garden Magazine. The exterior Christmas lights were impeccable and such a lighting display would run up a hefty power bill at most homes. To top it all off, the family were all travelling to visit and spend the holidays with family in Europe. One thing that was never revealed in the movie was the occupation of the heads of household. The outward appearance is in direct lineage with what the ideal American Christmas should look like. Therefore Americans pursue it. After all, what would Christmas be without the traditional imagery of Macy's and Bloomingdale's ?
In a 2018 poll conducted by the Harris Poll for the Nerd Wallet Survey, 89% of the 2,000 that were polled said that they were buying gifts for friends and family. Five years after the initial 2013 poll, shoppers said that they were planning to in fact increase their spending. According to the Harris Poll, 39.4 million Americans were still paying off 2017 holiday credit card debt alone. Its very easy to get caught up in the emotion, excitement, and tradition of the holidays but at what expense ?
According to financial coaching business owner Scott Gillespie, “We need to wake up as a society to the sobering truth of basic personal finance. To go deeper in debt is to do the opposite of providing. Its taking away from their livelihood by loaning away their future for the novelty of a holiday.” Since 2008, the amount of money that American consumers spent on holiday gifts has been increasing over the previous year. For 2019, industry experts forecast that the average American will spend $920 per person on holiday gifts, up from $885 in 2018 and reaching a total of more than $1 trillion in holiday spending. Spending on gifts is aside from hosting holiday parties/dinners, decorations and holiday travel with air travel being the most expensive.
There are ways to avoid these pitfalls. For starters, make and stick to a strict holiday shopping budget. Second, minimize purchases on credit cards. Thirdly, minimize your gift list. People rarely ask, "what happened to the stuff I bought you last year ?". Christmas shopping and the holiday as a whole took on a much different persona immediately after post World War II when America had a surplus. Since that time, coupled with the creation of the modern day shopping mall, Americans have spent more, accumulated more, and acquire more debt every year since then. Clearly the US is a consumer nation, subsequently a indebted nation.
How ironic it is that a holiday based on a person born in a barn, placed in a manger, wrapped in the most humble of cloth that went on to preach against greed and arrogance of the rich, while also compelling His adherents that they were to be lenders and not borrowers, would be the foundation of a holiday that drives participants to trample each other stampeding through department store doors to buy the latest gadgets supposedly at sale prices. These sales still drive consumers into massive debt and financial depression.