- Nearly a quarter of Americans (24%) wish the holidays were canceled this year because of the cost
- 28% of Gen Z and millennials say student loan repayments will make the holidays unaffordable this year
- Two-thirds of Gen Z and millennials say they will take on debt this holiday season
With the cost of living on the rise and credit card debt reaching record highs, many economists are wondering if the resumption of student loan payments will push consumers over the edge – especially as we approach the holiday season.
According to a new study conducted by Qualtrics on behalf of Intuit Credit Karma, more than a quarter (28%) of Gen Z and millennials say student loan repayments will make the holidays unaffordable this year. That’s compared to just 15% of Gen X and 4% of boomers+. Additionally, many young folks say burdensome student loan repayments will keep them from traveling home for the holidays. According to the study, nearly one-third (32%) of Gen Z will not be able to afford to travel home for the holidays this year because of student loan repayments, along with 25% of millennials.
The adding up of costs is putting a real damper on an otherwise festive season. Nearly one-third of Americans say they want to cry when they think about how much the holidays will cost them this year. That number jumps to 42% for Gen Z respondents and 37% for millennials. Beyond shedding tears, some Americans wish the holidays were canceled altogether. According to the study, nearly a quarter of Americans (24%) wish the holidays were canceled because of the cost. This was especially true for Gen Z, 32% of which said they could do without the holidays this year.
For those who still plan to partake in the holidays, many say they will spend less money, take on debt or skip gift-giving altogether. According to the study, nearly 40% of Americans (37%) intend to spend less money on things like gifts, travel and events this holiday season compared to last. Another 22% say they’re unable to afford gifts altogether, citing the rising cost of living (62%), living paycheck to paycheck (52%) and inflation (47%) as reasons for why they’re unable to afford gifts this year. Others have vowed to make sacrifices to be able to afford the holidays, including limiting their contributions to savings (26%), holiday decorations (23%) and hosting holiday parties (22%). Worth noting, nearly one-in-five Gen Z respondents (19%) say they will sacrifice necessities in order to afford the holidays.
For those who plan to spend more this holiday season, 42% say they will do so because they feel the need to treat those who they love – and it’s likely they will use debt to fuel some of their purchases.
According to the study, nearly 60% of Americans (59%) say they will take on debt this holiday season. Among those who plan to take on debt, 28% estimate they will take on up to $500 in debt, while another 31% estimate they will borrow more than $500 for the holidays. Generationally, Gen Z and millennials were the most likely to report plans to take on debt (66%). Of Americans who plan to take on debt, many will do so to purchase gifts for their family (63%) or kids (42%), while others expect to go into debt for essentials, like groceries for holiday meals (34%).
To offset holiday costs, many Americans (66%) say they will use credit card points and rewards to get through the holidays. Among those who plan to cash in on their credit card benefits, many will use them for gifts (37%), groceries (31%) and gas (25%).
“The holidays are often a joyful time of year, but they can also take a toll on consumers’ wallets,” said Courtney Alev, consumer financial advocate at Credit Karma. “This year, many Americans have another expense to factor into their holiday budgets: their federal student loan payments – and, if our survey is any indication, it could be what tips consumers over the edge. For those who are grappling with the rising cost of living and the resumption of student loan payments this holiday season, there are a few things you can do to get in the holiday spirit without breaking the bank. Start by making a budget using the 50/30/20 rule, where 30% of your monthly income goes toward “wants”, which includes holiday shopping, and 20% goes toward financial goals such as paying down debt, including student loans. Once you know how much money you have to spend, make a list of who and what you want to put money towards this holiday season. If that includes gift giving, shop around for the best prices and consider waiting for major holiday sales before buying gifts for family and friends.”
This survey was conducted online within the United States by Qualtrics on behalf of Intuit Credit Karma between October 10, 2023 and October 18, 2023 among 1,000 adults ages 18 and older.