In an amazing feat of will, some Americans are choosing not to shop at all this holiday season, resisting sales, novelty items--pillow pets!--and advertising jingles in favor of getting their finances and credit card debt in order.
The National Foundation of Credit Counseling (NFCC), a nonprofit financial counselor, estimates that as much as 40 percent of Americans won't be shopping. In a recent survey of 1,232 people, 40 percent responded that they "anticipate further financial distress" and will be spending zero dollars. Time to tell the kids the truth about Santa.
Of course, it's not that surprising that 40 percent of visitors to DebtAdvice.org, the NFCC's website where the survey was conducted, are hesitant to get into more debt over holiday junk. Perhaps more intriguing are the 10 percent of visitors also seeking debt advice who plan to spend as much or more as last year.
What is significant about the results is that even in the so-called economic recovery, a chunk of Americans are so anxious about their finances that they are seeking debt advice, even at that time of year when they're meant to be swiping themselves into a happy daze. The number of survey respondents who said they weren't planning to spend at all was up 6 percent from last year.
"Credit Card debt outstanding has been dwindling down on a year on year basis," said Jack Kleinhenz, the chief economist for the National Retail Federation. "People are whittling away at outstanding balances. It gives them a sense of relief that they can get their households back in order."
Indeed, while the economic picture is not as bleak as it once was -- on Friday, the Bureau of Labor Statistics announced that unemployment rate dropped to 8.6 percent in November, but some of the decrease was attributable to workers giving up finding a job. And this doesn't necessarily mean more people are hitting malls for gifts and decorations. This year many shoppers have been investing in practical items like cars. Auto sales were up 13.9% in November compared to a year earlier. "With better debt balances shoppers are using credit -- but wisely," Kleinhenz adds.
Black Friday seemed like another good sign for the economy this year -- 6.6 percent more people shopped than in 2010 in stores and on the web over the weekend, and total sales were up 16 percent. But with so many of the deals offered on basic goods like towels and sheets, it's impossible to tell who bought gifts and who jumped on Black Friday in a desperate attempt to acquire affordable household items.
It will be bad for the economy if, overall, shoppers do not end up spending more over the holidays than they do normally. But it's hard to argue with someone holding out on buying, say, a Snuggie in favor of paying an old bill or saving up for something practical, like a car.