Study Reveals State-by-State Christmas Savings Timeline for Families
A recent study highlights the varying lengths of time American households need to save for Christmas, revealing significant disparities across states. The analysis by the financial information platform Finanzas Justas underscores the financial strain many families face as the holiday season approaches. With approximately 15 weeks until Christmas, the findings indicate that early budgeting is crucial for a stress-free holiday.
The research utilized data from the National Retail Federation, which estimates the average consumer holiday spending in the U.S. at around $902 per person. By examining average disposable income levels and necessary expenses—including groceries and bills—researchers calculated how long households would need to save to cover this typical expenditure.
According to the study, some states fare better than others when it comes to saving for Christmas. In states like California, Colorado, Hawaii, Utah, Virginia, and Washington, families can manage to save for the holiday in as little as four months. Conversely, residents in states such as Alaska, Arizona, and Texas face a more daunting challenge, needing between five and seven months to accumulate enough funds.
The situation becomes increasingly challenging in other states. For example, families in Illinois, Kansas, and New York must save for eight to ten months. In certain cases, the financial outlook is even bleaker: households in New Hampshire, South Dakota, Ohio, and Pennsylvania may need over two years to save for an average Christmas. Notably, Arkansas families would require three years and seven months, while those in Indiana and Connecticut would need four years and two months and five years and nine months, respectively.
The analysis indicates that residents in five states—Kentucky, Louisiana, Michigan, Mississippi, and West Virginia—may never be able to save enough for an average Christmas given their current financial circumstances. The median monthly household income in these areas, when adjusted for average monthly expenses, leaves families effectively in debt.
In light of these findings, financial expert Leslie H. Tayne, Esq., founder of Tayne Law Group, addressed the common trend of Americans accumulating debt during the holiday season. She noted that many people become caught up in the festive spirit, often overspending and resorting to high-interest credit cards. “They panic about not having the right gift or enough food for guests,” she explained. “Once the holiday season is over, they are left with a balance on their credit accounts that they can’t pay off.”
To mitigate this issue, Tayne advises families to begin budgeting for the holiday season at least six months in advance. She suggests contributing additional funds to savings or establishing a separate account dedicated to holiday expenses. Reviewing previous year’s spending can also help families set realistic savings goals. Furthermore, starting to purchase gifts throughout the year can alleviate the financial burden that typically arises as Christmas approaches.
Tayne emphasizes the importance of avoiding debt for holiday spending. She warns that many consumers operate under the assumption that anticipated raises or bonuses will cover holiday expenses. If these expectations are not met, the financial repercussions can be severe, leading to mounting credit card bills.
As families across the United States prepare for the upcoming holiday season, this study serves as a reminder of the importance of early financial planning and the challenges many face in achieving a financially secure Christmas.
