As Americans gear up for the holiday season, the latest Bank of America Winter Spending Survey has unveiled a significant shift in holiday spending trends, particularly among younger Americans.
With more than 40% of respondents expressing their intention to tighten their belts this festive season, what stands out most is the resilience of the younger generations when it comes to their holiday shopping plans. In fact, millennials and Generation Z seem least inclined to reduce their holiday expenditures.
However, to maintain a healthy spending pattern, the survey also sheds light on a significant surge in the adoption of “Buy Now, Pay Later” services within this population cohort. This shift in payment preferences suggests holiday spending might extend into the early months of the following year, potentially boosting overall holiday sales.
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Key Insights from Bank of America’s Consumer Holiday Spending Study
Millennials and Gen Z’s Debt-Driven Approach: Nearly half of millennial and Gen Z respondents are more likely to finance their holiday spending through debt, the Bank of America Institute revealed. This debt includes credit card balances, taking out loans or borrowing from others.
Shopping Timing Differs Between Young And Old Consumers: Millennials and Gen X consumers show a strong inclination towards promotional events like Black Friday and Cyber Monday, capitalizing on deals and discounts to stretch their holiday budgets. In contrast, Baby Boomers tend to commence their holiday spending earlier in November, adhering to a more traditional approach.
Younger Generations Witness Declining Deposits: Despite having higher deposit balances compared to pre-COVID-19 pandemic levels, younger generations are experiencing a faster decline in their savings. This decline coincides with the resumption of student loan repayments, which is putting additional pressure on their finances.
Gloomy Economic Outlook Looms: The survey paints a rather pessimistic economic outlook among young adults, with both Gen Z and millennials expressing concerns. Approximately half of the respondents in these age groups anticipate a downturn in the economy over the next year, suggesting a heightened…
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