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CUNACFA Desires to cut holiday spending soar
WASHINGTON (11/25/08)—The number of consumers saying they are determined to spend less this year on holiday gifts soared, according to the results of the ninth annual survey commissioned by the Consumer Federation of America (CFA) and the Credit Union National Association (CUNA). “Each year from 2003 to 2007, between 30% and 35% of consumers.
Click to view larger image CUNA Chief Economist Bill Hampel explains the results of the CFA/CUNA survey on consumer holiday spending during the press conference today (Monday)at the National Press Club unveiling the survey and results. Representatives from national and regional news organizations attended the event, including NBC News, AP TV, Fox, CNN, Bloomberg, and ABC radio.
reported that they were planning to cut back their holiday spending,” said CUNA Chief Economist Bill Hampel Monday at a press conference held to discuss the survey findings. This year, he noted, that figured soared. Fifty-five percent of respondents, interviewed by phone between Nov. 6-9, said they were planning to reduce spending “somewhat,” with 27% indicating that they want to spend “much less than last year.” “As a result,” Hampel said, “we may see an actual decline in holiday spending for the first time in many years.” Not surprisingly, the shaky state of the economy and peoples’ concerns about their financial futures were cited as the foremost factor determining consumers’ desire to cut back on holiday spending—36% of those who intend to reduce spending said that was their main reason. “The financial crisis and sustained economic downturn the nation has been experiencing are taking their toll on consumers,” Hampel explained. “People are worried about their finances, job loss, and what the future will hold. Amid their uncertainty, they are reacting by reining in their spending plans.” Hampel said a primary factor fueling financial anxiety is concern about meeting monthly debt obligations. CFA Executive Director Stephen Brobeck noted that a record 48% said this was a concern, with 23% indicating they were “very concerned.” A year ago, only 40% said they were concerned, and that was amid rocketing gasoline and energy costs. Also named as factors contributing to lower spending plans this year: 22% said they had less money; 12.5% cited a desire to save or reduce debt; 10.5% pinned it on higher prices; and 9% said they have less income. The CFA/CUNA report is based on the recent survey of more than 1,000 representative adult Americans by Opinion Research Corporation. The CFA and CUNA suggest the following holiday spending tips to help consumers avoid falling into a seasonal debt trap:
* Make a budget and list what you will buy and how much you can afford to spend and then stay within that budget: * Comparison shop: You can easily save more than 10% on most items by comparing prices at different stores. Often the savings are even greater; * Pay off your holiday debts quickly and remember you are less likely to overdo if you pay with cash or check than if you use either credit or debit cards; * Start saving now for 2009—open 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; * Be smart about gift cards: read the fine print on each card. If you don’t use the card quickly, it can lose value. There may be a fee for checking your balance as well as a monthly inactivity, maintenance, administrative, or service fee; * Pay attention to return policies. Some stores are tightening return policies. Also keep receipts and note time limits, restocking fees, and other factors that may affect your recipient; * And also, find low- or no-cost ways to enjoy the holiday season. Just a few changes to holiday habits can really ease the strain on a spending budget. Draw names to reduce the number of people for whom you buy gifts; give homemade items; make your own gift wrap; organize a potluck dinner rather than preparing and paying for the entire holiday meal.
CFA’s Brobeck advised, “With just a little planning, consumers can substantially reduce their holiday spending without sacrificing holiday quality.”


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