Whether you waited in line on Black Friday’s Eve or are planning on hunting Amazon for the best deals on Cyber Monday, the odds are you will probably partake in the holiday deal-stealing and spending that follows Thanksgiving. According to an online sales report from Adobe, online sales last Thursday totaled $1.7 billion, while a survey by Deloitte expects consumers to spend an average of 25% more this year than they did in 2014. While the economy does seem to be back in full swing tempting us to take advantage of all the enticing sales, it’s also a crucial time to practice self-control.
In 2013, the Federal Reserve released findings from a survey of U.S. households, noting that only 48% of respondents could cover a hypothetical emergency expense of $400 without selling or borrowing and only 39% of respondents had a rainy day fund adequate to cover three months of expenses. A survey in June of 2015 by Bankrate.com had similar findings, noting that 29% of Americans had no emergency savings and only 22% had enough emergency savings to cover 6 months worth of expenses. These numbers should cause all of us to take stock of whether or not we would be able to handle an emergency expense, particularly as we head into a season of heavy spending. While we certainly don’t want to sound like Scrooge himself, it is important to give within the confines of a budget. It’s never a good idea to dip into emergency savings for anything that isn’t an emergency – even if that big screen TV is 25% off. The greatest gift you can give your family is financial peace this holiday season so do yourself a favor and put savings first.
Herron, Janna. “Americans still lack savings despite bigger paychecks.” Bankrate.com. June 23, 2015. http://www.bankrate.com/finance/consumer-index/americans-still-lack-savings-despite-wage-growth.aspx
“Report on the Economic Well-Being of U.S. Households in 2013.” Board of Governors of the Federal Reserve System. August 15, 2014. http://www.federalreserve.gov/econresdata/2014-economic-well-being-of-us-households-in-2013-executive-summary.htm.