This is no doubt a good sign for retailers — especially given those ho-hum Black Friday sales reports — but just because consumers plan on shelling out bigger bucks this year doesn’t necessarily mean they can afford it.
Holiday budgets may have swelled but wages certainly haven’t.
Over the last 30 years, median hourly wages for Americans rose just 6.1% (0.2% annually on average) and the lowest-paid workers (the bottom 10%) actually saw their earnings decline by 5.3%, according to the Economic Policy Institute.
As such, household earnings have barely kept pace with the rising cost of fixed expenses — the roofs over our heads, the cars in our driveways, and the food on our tables.
On top of that, less than half of Americans said they would be able to come up with cash for a $1,000 emergency expense in a recent survey by the Consumer Federation of America.
And yet, we’re hitting the malls anyway. Should we be worried?
“If
we continue to live over our means, we’re just going to have to repeat
the lessons we learned during the recession,” says Tiffany Aliche,
founder of "The Budgetnista," personal finance educator and author. "Not only are we not saving but we’re spending what we can’t afford.”
Larger
families arguably have an even more difficult time stretching their
dollars around the holidays. When Aliche lost her job as a schoolteacher
during the recession, she and her family implemented a new holiday
tradition: each Thanksgiving, she and her four sisters put their names
into a hat and agreed to purchase a holiday gift for only one person.
For their parents, they pooled their cash and bought a group gift.
“It’s
fun but you have to get everybody on board,” she says. “It’s much
easier for everybody to put in $50 than me purchasing a $250 gift by
myself.”
Culled from yahoo finance
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