Click here to close now.

Welcome!

Symbian Authors: Jack Newton, Kevin Benedict, Matthew Lobas, Shelly Palmer, RealWire News Distribution

News Feed Item

CUNA/CFA 13th annual holiday spending survey shows consumers plan to spend more; CUNA/CFA also share tips to keep holiday debt under control

Spending Plans May Reflect Perceived Improvement in Financial Situation and Less Concern About Repaying Debt

Gap Between Affluent and Poor Widens

WASHINGTON, Nov. 21, 2012 /PRNewswire-USNewswire/ -- More consumers plan to spend more than last year, and fewer consumers less than last year, according to the 13th annual holiday spending survey conducted by the Consumer Federation of America (CFA) and the Credit Union National Association (CUNA).  In the past year, the percentage who said they would spend more than last year rose from 8 to 12, and the percentage who said they would spend less declined from 41 to 38.  These differences are statistically significant.

In both years, the survey questions were developed by CFA and CUNA and were administered to a representative sample of adult Americans by ORC International in early November (9-13 this year).  This year, 660 persons were interviewed by landline and 352 by cell phone.

"Our survey results suggest that holiday spending this year will likely rise by between 3.5% and 4% compared to last year," said Bill Hampel, Chief Economist for the Credit Union National Association.  "This represents the fourth year of gradual improvement in holiday spending plans since a sharp decline in such plans in 2008." 

The intention of consumers to increase holiday spending from last year is consistent with, and may well reflect, perceived improvement in their financial situation.  From 2011 to 2012, the percentage who said their financial situation was better than a year ago rose from 19 to 24, and the percentage who said it was worse fell from 37 to 33.  Again, the change is statistically significant.

Despite the rise of student debt and continued concern about mortgage debt, the percentage of those who said they were concerned about meeting monthly debt payments fell from 45 to 43 percent.  And those who said they were unconcerned rose marginally from 38 to 39 percent.  One factor here might be the increasing percentage -- 19 to 24 percent in the past year -- who said they did not have any credit card payments. 

Yet, things are still financially tight for many families.  When asked if they had extra funds (not including lines of credit) available to pay for an unexpected expense of $1,000, only 49 percent said that they did.  This lack of emergency savings may help explain why an increasing percentage -- 38 to 43 over the past year -- said that, if they received an unexpected windfall of $5,000, they would use most of it to add to savings or investments. 

Gap Between Affluent and Poor Widens

There have been many studies and press reports on huge income and wealth gaps between high- and low-income families.  But there has been little focus on whether these gaps have increased over the past year.  The 2011 and 2012 surveys suggest that they have.

Whether respondents reported they would increase or decrease holiday spending from last year was related to income.  Among those with incomes under $25,000, 11 percent said they would spend more while 44 percent said they would spend less.  Among those with incomes over $100,000, 18 percent said they would spend more while 31 percent would spend less. 

These income-related differences in spending plans may well reflect perceptions about one's financial situation.  Among the low-income group, only 21 percent said this situation was better than last year while 45 percent said it was worse.  Among the upper-income group, 30 percent said their financial situation was better while only 23 percent said it was worse.

The linkage between holiday spending plans and perceived financial situation was made even clearer by correlating the two variables. Among those who said their situation had improved, 31 percent were planning to spend more than last year while only 19 percent were planning to spend less. But among those who said their situation had worsened, only 2 percent were planning to spend more than last year while 66 percent were planning to spend less.

"It is unfortunate that families with the lowest incomes are more likely than high-income families to think their financial situation has deteriorated over the past year, so are more likely to cut back holiday spending," said CFA Executive Director Stephen Brobeck.   

Even though fewer lower-income than upper-income families carry consumer and mortgage debt, a far higher percentage of the former than the latter expressed concern about this debt -- 51 vs. 28 percent.   In part, this may reflect the fact that only 19 percent of the lower-income, but 82 percent of the upper-income, respondents said they had extra funds to cover a $1,000 unexpected expense.

CUNA/CFA Tips For Keeping Holiday Debt Under Control

CUNA and CFA suggest the following tips to avoid getting deep into debt during the holidays.  "With just a little planning, consumers can substantially reduce their holiday spending debt load without sacrificing holiday quality," Brobeck said.

Make a Budget, and a List: Right now, decide how much you can afford to spend and stay within that budget.  Staying within budget will be much easier if you make a price list of all gifts and other holiday items you plan to purchase.  Even if it's a more general rather than detailed list, it will still help you avoid overspending and impulse buys.

Check It Twice:  Make sure your list includes not only gift or gift recipients, but also all the projects and activities that make up your holiday.  It's easy to overlook extra expenses for holiday foods, party clothes, holiday decor and postage.  Examine each item and ask yourself, "Does it earn its place in our celebration?" You might discover how much you're doing just out of habit or perceived expectation.

Comparison Shop: You can easily save more than 10 percent on most items, sometimes considerably more, by comparing prices at different stores. The Internet and smart phones have made comparison shopping that much easier.  But when shopping online, shop wisely.  Be sure you are purchasing from a secure site and review emailed statements for accuracy as you receive them.

Make Time Your Ally.  The reason to start sooner rather than later is that when you delay, you pay.  At last minute, you have to settle for something, and it might cost more than you wanted or planned to pay.  After Christmas is a good time to shop for next year's presents.  You can find some great bargains right after the holidays.  Then tuck those gifts away until next season (just don't forget about them!).  Another benefit to starting early:  It gives you more time to find the "right" gift and avoid impulsive decisions, which too often leave you less happy with your purchase.

Pay Off Debts Quickly: You're less likely to overdo it if you pay in cash.  If you must make holiday purchases using credit, use a lower-interest card (you'll often find lower rates on credit union cards) and pay off this debt as soon as possible early next year. Don't borrow more than you can repay in several months. Remember that credit card debt is relatively expensive.  And if you only make the required minimum monthly payment, you may never pay off the debt.

Plan for Next Year by Opening a Christmas Club Account: While these accounts do not pay much, if any, interest, they provide a practical way to save small amounts over time. Ask your credit union or bank to automatically transfer funds from your checking to your Christmas Club account every month. The discipline of saving reinforces your good budget intentions.  Find credit unions you're eligible to join at www.aSmarterChoice.org

See what's in your supply drawer:  You may have more wrapping paper, ribbons, unused cards and gift boxes stored away from last season than you realize.  Use up those holiday supplies first to trim down the amount you'll have to buy this season.

Understand how layaway programs work. An old holiday standby -- store layaway programs -- have re-emerged this holiday season, allowing consumers to put items on hold at the store and pay for them over time.  Before deciding to use layaway, know the payment schedule and read the fine print.  Be realistic about how these payments will fit into your spending plan and what you can really afford. Understand the layaway policy including time between payments and schedule of payments, service fees, late and cancellation fee policies, refund and exchange policies.

Be Smart About Gift Cards: The rules today significantly restricted gift card expiration dates and fees compared to several years ago. But those who give or receive a gift card should still read the fine print. And if you get a gift card, use it sooner rather than later to avoid forgetting about unused balances on the card, or forgetting about the card altogether.  And if you still have gift cards you received from others last year, use them to shop this year. It's a smart way to reduce your out-of-pocket expenses.

Pay Attention to the Return Policy.  Some stores have tighter policies.  Pay attention to the return policy when you make a purchase; keep receipts and note time limits, restocking fees, and other factors that may affect your recipient.

Find Some Low- or No-Cost Ways to Celebrate.  Adding a few changes can ease the strain on your spending budget.  For example, draw names to limit the number of people for whom you purchase gifts; give homemade items; make your own gift wrap; organize a potluck rather than trying to make, and pay for, the entire holiday meal. 

Credit Union National Association (CUNA) is the primary national trade association for the country's 7,300 state and federally chartered credit unions, which are not-for-profit financial cooperatives serving more than 95 million Americans. More at www.cuna.org.  To learn more about or locate credit unions: www.aSmarterChoice.org  

The Consumer Federation of America is an association of nearly 300 nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education.

SOURCE CFA-CUNA

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
The explosion of connected devices / sensors is creating an ever-expanding set of new and valuable data. In parallel the emerging capability of Big Data technologies to store, access, analyze, and react to this data is producing changes in business models under the umbrella of the Internet of Things (IoT). In particular within the Insurance industry, IoT appears positioned to enable deep changes by altering relationships between insurers, distributors, and the insured. In his session at @ThingsExpo, Michael Sick, a Senior Manager and Big Data Architect within Ernst and Young's Financial Servi...
Performance is the intersection of power, agility, control, and choice. If you value performance, and more specifically consistent performance, you need to look beyond simple virtualized compute. Many factors need to be considered to create a truly performant environment. In his General Session at 15th Cloud Expo, Harold Hannon, Sr. Software Architect at SoftLayer, discussed how to take advantage of a multitude of compute options and platform features to make cloud the cornerstone of your online presence.
Even as cloud and managed services grow increasingly central to business strategy and performance, challenges remain. The biggest sticking point for companies seeking to capitalize on the cloud is data security. Keeping data safe is an issue in any computing environment, and it has been a focus since the earliest days of the cloud revolution. Understandably so: a lot can go wrong when you allow valuable information to live outside the firewall. Recent revelations about government snooping, along with a steady stream of well-publicized data breaches, only add to the uncertainty
The explosion of connected devices / sensors is creating an ever-expanding set of new and valuable data. In parallel the emerging capability of Big Data technologies to store, access, analyze, and react to this data is producing changes in business models under the umbrella of the Internet of Things (IoT). In particular within the Insurance industry, IoT appears positioned to enable deep changes by altering relationships between insurers, distributors, and the insured. In his session at @ThingsExpo, Michael Sick, a Senior Manager and Big Data Architect within Ernst and Young's Financial Servi...
PubNub on Monday has announced that it is partnering with IBM to bring its sophisticated real-time data streaming and messaging capabilities to Bluemix, IBM’s cloud development platform. “Today’s app and connected devices require an always-on connection, but building a secure, scalable solution from the ground up is time consuming, resource intensive, and error-prone,” said Todd Greene, CEO of PubNub. “PubNub enables web, mobile and IoT developers building apps on IBM Bluemix to quickly add scalable realtime functionality with minimal effort and cost.”
Docker is an excellent platform for organizations interested in running microservices. It offers portability and consistency between development and production environments, quick provisioning times, and a simple way to isolate services. In his session at DevOps Summit at 16th Cloud Expo, Shannon Williams, co-founder of Rancher Labs, will walk through these and other benefits of using Docker to run microservices, and provide an overview of RancherOS, a minimalist distribution of Linux designed expressly to run Docker. He will also discuss Rancher, an orchestration and service discovery platf...
Sensor-enabled things are becoming more commonplace, precursors to a larger and more complex framework that most consider the ultimate promise of the IoT: things connecting, interacting, sharing, storing, and over time perhaps learning and predicting based on habits, behaviors, location, preferences, purchases and more. In his session at @ThingsExpo, Tom Wesselman, Director of Communications Ecosystem Architecture at Plantronics, will examine the still nascent IoT as it is coalescing, including what it is today, what it might ultimately be, the role of wearable tech, and technology gaps stil...
Every innovation or invention was originally a daydream. You like to imagine a “what-if” scenario. And with all the attention being paid to the so-called Internet of Things (IoT) you don’t have to stretch the imagination too much to see how this may impact commercial and homeowners insurance. We’re beyond the point of accepting this as a leap of faith. The groundwork is laid. Now it’s just a matter of time. We can thank the inventors of smart thermostats for developing a practical business application that everyone can relate to. Gone are the salad days of smart home apps, the early chalkb...
With several hundred implementations of IoT-enabled solutions in the past 12 months alone, this session will focus on experience over the art of the possible. Many can only imagine the most advanced telematics platform ever deployed, supporting millions of customers, producing tens of thousands events or GBs per trip, and hundreds of TBs per month. With the ability to support a billion sensor events per second, over 30PB of warm data for analytics, and hundreds of PBs for an data analytics archive, in his session at @ThingsExpo, Jim Kaskade, Vice President and General Manager, Big Data & Ana...
CommVault has announced that top industry technology visionaries have joined its leadership team. The addition of leaders from companies such as Oracle, SAP, Microsoft, Cisco, PwC and EMC signals the continuation of CommVault Next, the company's business transformation for sales, go-to-market strategies, pricing and packaging and technology innovation. The company also announced that it had realigned its structure to create business units to more directly match how customers evaluate, deploy, operate, and purchase technology.
In the consumer IoT, everything is new, and the IT world of bits and bytes holds sway. But industrial and commercial realms encompass operational technology (OT) that has been around for 25 or 50 years. This grittier, pre-IP, more hands-on world has much to gain from Industrial IoT (IIoT) applications and principles. But adding sensors and wireless connectivity won’t work in environments that demand unwavering reliability and performance. In his session at @ThingsExpo, Ron Sege, CEO of Echelon, will discuss how as enterprise IT embraces other IoT-related technology trends, enterprises with i...
When it comes to the Internet of Things, hooking up will get you only so far. If you want customers to commit, you need to go beyond simply connecting products. You need to use the devices themselves to transform how you engage with every customer and how you manage the entire product lifecycle. In his session at @ThingsExpo, Sean Lorenz, Technical Product Manager for Xively at LogMeIn, will show how “product relationship management” can help you leverage your connected devices and the data they generate about customer usage and product performance to deliver extremely compelling and reliabl...
The Internet of Things (IoT) is causing data centers to become radically decentralized and atomized within a new paradigm known as “fog computing.” To support IoT applications, such as connected cars and smart grids, data centers' core functions will be decentralized out to the network's edges and endpoints (aka “fogs”). As this trend takes hold, Big Data analytics platforms will focus on high-volume log analysis (aka “logs”) and rely heavily on cognitive-computing algorithms (aka “cogs”) to make sense of it all.
One of the biggest impacts of the Internet of Things is and will continue to be on data; specifically data volume, management and usage. Companies are scrambling to adapt to this new and unpredictable data reality with legacy infrastructure that cannot handle the speed and volume of data. In his session at @ThingsExpo, Don DeLoach, CEO and president of Infobright, will discuss how companies need to rethink their data infrastructure to participate in the IoT, including: Data storage: Understanding the kinds of data: structured, unstructured, big/small? Analytics: What kinds and how responsiv...
Since 2008 and for the first time in history, more than half of humans live in urban areas, urging cities to become “smart.” Today, cities can leverage the wide availability of smartphones combined with new technologies such as Beacons or NFC to connect their urban furniture and environment to create citizen-first services that improve transportation, way-finding and information delivery. In her session at @ThingsExpo, Laetitia Gazel-Anthoine, CEO of Connecthings, will focus on successful use cases.
The Workspace-as-a-Service (WaaS) market will grow to $6.4B by 2018. In his session at 16th Cloud Expo, Seth Bostock, CEO of IndependenceIT, will begin by walking the audience through the evolution of Workspace as-a-Service, where it is now vs. where it going. To look beyond the desktop we must understand exactly what WaaS is, who the users are, and where it is going in the future. IT departments, ISVs and service providers must look to workflow and automation capabilities to adapt to growing demand and the rapidly changing workspace model.
Sensor-enabled things are becoming more commonplace, precursors to a larger and more complex framework that most consider the ultimate promise of the IoT: things connecting, interacting, sharing, storing, and over time perhaps learning and predicting based on habits, behaviors, location, preferences, purchases and more. In his session at @ThingsExpo, Tom Wesselman, Director of Communications Ecosystem Architecture at Plantronics, will examine the still nascent IoT as it is coalescing, including what it is today, what it might ultimately be, the role of wearable tech, and technology gaps stil...
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity.
The Internet of Things (IoT) promises to evolve the way the world does business; however, understanding how to apply it to your company can be a mystery. Most people struggle with understanding the potential business uses or tend to get caught up in the technology, resulting in solutions that fail to meet even minimum business goals. In his session at @ThingsExpo, Jesse Shiah, CEO / President / Co-Founder of AgilePoint Inc., showed what is needed to leverage the IoT to transform your business. He discussed opportunities and challenges ahead for the IoT from a market and technical point of vie...
IoT is still a vague buzzword for many people. In his session at @ThingsExpo, Mike Kavis, Vice President & Principal Cloud Architect at Cloud Technology Partners, discussed the business value of IoT that goes far beyond the general public's perception that IoT is all about wearables and home consumer services. He also discussed how IoT is perceived by investors and how venture capitalist access this space. Other topics discussed were barriers to success, what is new, what is old, and what the future may hold. Mike Kavis is Vice President & Principal Cloud Architect at Cloud Technology Pa...