Americans spent more on travel, dining out and other gatherings as the country reopened this summer. And now, many women are worried about upcoming holiday expenses as the season approaches.
Some 38% of women are anxious about holiday costs, according to an Ellevest survey on financial wellness. While the summer’s extra spending may be adding to the stress, the bigger issue is the pandemic’s lingering effects.
“The pandemic disproportionately impacted women,” said Ellevest CEO Sallie Krawcheck, explaining how the crisis has only widened gender gaps for investing, savings and debt.
And with holiday prices this year projected to rise as much as 20%, according to Salesforce, women may risk adding to debt without a plan.
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Roughly 33% of American consumers racked up debt during the 2020 holiday season, according to MagnifyMoney, with the average borrower amassing $1,381.
More than half of borrowers used credit cards to fund their purchases, and nearly 90% said they wouldn’t pay off balances within a month.
However, October is the perfect time to recalibrate and plan a more proactive approach to holiday spending, Krawcheck said.
“It gives us an opportunity to take a breath, take stock and prepare ourselves for what can be a pretty expensive end of the year,” she said.
Those worried about holiday expenses should start by setting spending priorities, Krawcheck said.
For example, someone may be eager to visit family if they missed the opportunity last year.
“The important thing is making sure that you are clear on your goals and getting them ranked,” said Krawcheck, suggesting a written list of must-haves.
With a clear list of goals, someone can craft a holiday budget by reviewing the past few years’ bank statements from December to figure out how much to allocate for each expense.
While budgeting for holiday expenses may help women stick with year-end financial goals, some may still struggle with bad feelings about spending.
One-third of women often wrestle with guilt for “spending too much money” after a big purchase, the survey shows, and these attitudes may be stunting money confidence.
“Make sure you’re giving yourself permission to use money in a way that you feel good about,” Krawcheck said.
One way to reduce financial stress is by talking openly about money with partners, friends and family, the survey shows.
Although one-third of women steer clear of money conversations, those who open up feel more supported and informed.
Although women rank financial wellness as less important than mental, physical and spiritual health, money stress often spills into other areas of life, according to the survey.
Nearly half of women say their mental and emotional well-being has suffered from financial stress, and almost the same percentage reported more money anxiety the pandemic began.
“We tend not to prioritize financial wellness and it corrodes everything else,” Krawcheck said.
Ellevest worked with Censuswide to conduct the survey from Sept. 23 to Sept. 29, surveying 2,026 Americans aged 18 to 69.