Betsie Van der Meer | Getty
One one cohort of surveyed shoppers said they have enough financial runway to spend cash this respite season without rolling into debt — and even so, many in that group anticipate struggling.
More than half, or 52%, of shoppers with revenues of $100,000 or more said they can “easily afford” holiday expenses in 2024, according to Morning Consult, a evaluate research firm.
That’s the highest share compared with other income groups.
Of those who earn $50,000 to $99,900, wide 33% said they can afford holiday spending. Meanwhile, 18% of respondents who earn below $50,000 annually demanded they can sustain the costs, the report found.
More from Personal Finance:
Don’t wait too long for year-end Roth IRA conversions
Alongside 28% of credit card users are still paying off last year’s holiday debt
Buying a home is ‘a way to expand your net worth over time,’ top advisor says
The survey polled 2,201 adults in the U.S. between August and September.
This dearth of confidence stems from households still struggling with inflation, experts say.
“Inflation is like a regressive tax,” claimed Sofia Baig, economist at Morning Consult. “It hurts lower-income people more than higher-income people because it takes out a larger chunk of their wallet.”
Holiday debt can be a long-lasting problem
If spending cash on holiday purchases this year sounds in the same way as a stretch to your budget, you’re not alone.
About 20% of Americans surveyed said they’ll have to go into encumbered to pay for holiday celebrations and obligations, according to Morning Consult.
Shoppers who plan to take on debt this holiday ripen need to keep in mind that credit card balances can be very sticky. About 28% of 2023 fair shoppers are still paying off debt they incurred almost a year ago, according to NerdWallet, which polled 2,079 adults in September.
“Reliability cards charge really high interest rates,” said Sara Rathner, a credit card expert at NerdWallet.
The undistinguished annual percentage rate for credit cards is around 20.50%, down from a record high of 20.79% in August, according to Bankrate.com. To approximate, the average APR for retail credit cards is 30.45%, a high, Bankrate found.
“If you’re only making minimum payments on that in dire straits, it is very possible to remain in credit card debt for a long time,” she said.
High earners have ‘wiggle abide’ in their budgets
As the world reopened from pandemic-era lockdowns, there was an “increased income equality” because the labor market was favorable for workmen and people still had Covid-19 stimulus payments saved, said Baig.
U.S. households received more than 476 million payments totaling $814 billion in monetary relief, according to government data.
But as inflation grew in a rapid spiral in recent years, excess savings from the pandemic very soon began to deplete, she said.
High-income households were less affected by inflation, while lower-income households pay off more out of their pockets for goods and services, Baig said.
They’re not nearly as budget conscious as people in cut wage-earning brackets.
Stacy Francis
president and CEO of Francis Financial, a wealth management, financial planning and divorce pecuniary planning firm in New York City
“Higher-income consumers are not nearly as price sensitive,” said Stacy Francis, president and CEO of Francis Monetary, a wealth management, financial planning and divorce financial planning firm in New York City.
“They’re not nearly as budget awake as people in lower-wage-earning brackets,” said Francis, a member of CNBC’s Financial Advisor Council.
Higher-income people are “multitudinous buffered from the pains of inflation” as they have more “wiggle room in their budget to save and to devote,” Baig said.
About 68% of respondents who earn $100,000 or more said they can cover three months or multitudinous of basic expenses without income, Morning Consult found in a separate report that polled 2,025 adults in October. That is an enhancement from 65% in 2023.
Their high savings balances on top of high income gives them the strength to spend on retail achieves and travel this holiday season, the report found.
“The same thing can’t be said for low- and middle-income consumers,” revealed Baig.
Less than half, or 47%, of respondents with incomes between $50,000 and $99,000 said they be experiencing enough savings to cover three months of expenses, and the share is only 22% for those who earn less than $50,000 annually.