Colder weather is coming, which means it’s time to start thinking about holiday shopping. But shoppers are treading cautiously this year, and they may not be rushing to open their wallets just yet.

This holiday season, a whopping 80% of shoppers said they plan to spend the same amount or less than they did in 2020 last year, according to Stash’s October 2021 survey*.

Last year, holiday shopping arrived while the Covid-19 pandemic was in full swing, and before the widespread rollout of vaccines. Consumers spent an average $312 during the four-day stretch from Thanksgiving to Cyber Monday, the traditional kickoff for holiday gift purchases, a 14% decrease compared to the same period in 2019. That number could be even lower this year, if Stash’s survey is any indication.

Saving is a priority

Meanwhile, 2020 was a record year for saving, as people spent more time at home and less money on restaurants, entertainment, and other non-essential items. Additionally an influx of cash from stimulus payments from the government helped boost cash in the bank. The personal savings rate increased to 33.8% in April 2020, up from 8.3% in February 2020, before the pandemic took hold. 

Gen Z, perhaps the youngest generation shopping for gifts this year, saved more than any other age group. Stash’s survey found that 47% of Gen Z saved more this year than they did in the previous year, compared to 42% of millennials, 32% of Gen X , and 26% of baby boomers.

As the holiday season begins, here’s how Gen Z  is planning to spend. 

Unwrapping Gen Z’s holiday habits  

Gen Z is divided about spending plans for the holidays this year: Roughly 35% of Gen Z respondents plan on spending less than last year, with the remaining 65% split evenly between spending more, and spending the same, according to the Stash survey. 

Looking for bargains and using debit

Of all the generations surveyed by Stash, Gen Z is the most likely to take advantage of Black Friday deals this year. Twenty-seven percent of Gen Z said that they would start shopping on Black Friday, compared to 18% of Millennials, 15% of Gen X, and 15% of baby boomers. 

When asked how they plan to pay for their holiday gifts this year, Gen Z said that they plan to 

use a debit card, also a larger percentage than other generations. Forty-four percent of Gen Z respondents said they would use a regular debit card, and 20% said they would use a rewards debit card. Millennials and Gen Z are more likely than older generations to use debit than credit, according to a recent study. Millennials and Gen Z also average 14% fewer credit cards than adults older than 35, according to the same report. This research could indicate that younger generations might be more apprehensive when it comes to taking on debt, opting instead for a debit card. A rewards debit card also allows them to get some of the benefits of credit, without accruing the debt.

Here are the top two ways each generation shopping, per Stash’s survey:

0%
Standard debit card
0%
Rewards debit card
0%
Standard debit card
0%
Rewards credit card
0%
Standard debit card
0%
Rewards credit card
0%
Rewards credit card
0%
Standard debit card

Gen Z and millennials are also more likely to use Buy Now Pay Later (BNPL) services than other generations, with a little more than a third of each demographic saying they will use BNPL this holiday season. 
Twenty-four percent of Gen Z plans on giving an investment as a gift this year, more than any other generation, according to the Stash survey. When it comes to receiving gifts, Gen Z is expecting to receive money. Almost three quarters of Gen Z respondents said that they will get money as a holiday gift this year, versus 59% of millennials, 44% of Gen X, and 22% of baby boomers. More than half of Gen Zers hope to save the money they receive this holiday season, while 21% wants to spend it, and 14% wants to invest.

Spending and saving tips for the holidays

While more than two-thirds of Gen Z respondents (per Stash survey) said they will use a debit card this holiday season, only 20% said that they would use a rewards debit card. As you’re buying your holiday gift this year, consider using your Stash Stock-Back®1card, which is a debit card that can also help you invest. When you purchase something with your Stock-Back® card, a percentage of the purchase value is invested in your Stash portfolio. 

It’s also important to approach your holiday shopping season with a plan. Start by taking a look at your budget and seeing where you’ll need to make adjustments. If you’re using something like the 50-30-20 budget, your budget might have room for fixed expenses, variable expenses, and savings and investing. You may have to shift some of your spending from going out to eat to buying gifts, for example. Or you may have to move some money from savings to do your shopping. 

If you’re planning on receiving money this year, remember to account for it after the holidays. You might want to save it for the long term, or put it toward your retirement. Or you might want to add it to your brokerage account so you can invest in stocks, bonds, and funds.

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