What's Normal for Consumers to Spend This Holiday Season?

The holiday season is not an inexpensive one. Every year, many of us begin January not with warm memories of the season just passed, but with credit card bills demanding to be repaid. For some consumers, this year figures to be no different. Since debt is such a widespread and accepted part of the season, it's worth asking: how much are consumers spending each year? And on what, exactly, are they spending it?

2010 National Retail Federation surveys say the average consumer will spend $689.27 this year. Here's the category breakdown:

Gifts For Family

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By far the biggest chunk of the average consumer's holiday budget goes to gifts for family members. NRF surveys indicate that this year, the typical person will spend $393.55 - over half of their entire budget - on these gifts alone. It's not very difficult to see why: Parents everywhere know that Christmas is the most eagerly awaited day of the year for their children. Spouses also know that their significant others are expecting special gifts too. Thus, we see big-ticket purchases like:

• Expensive jewelry
• New video game systems
• Cars
• Lavish vacations
• Spa memberships

None of these items are cheap and they go a long way toward explaining why the lion's share of holiday spending happens at home.

Candy & Food

(ShutterBugChef)

The second biggest category of the typical holiday budget is candy and food. On average, each consumer will spend $86.32 on candy canes, cookies and other assorted goodies this year. Once more, it's easy to see why so much would be spent here. Between Holiday parties, corporate functions and school events, some families contribute money toward three or more separate holiday parties each and every year.

Of course, families who actually host the parties likely spend even more than the surveyed amount because they typically cook the main course. In any case, food and candy is clearly a substantial slice of the average holiday budget.

Gifts For Friends

(IngaMun)

It may surprise some readers to see that less is spent on gifts for friends (an average of $71.45) than on food. It just goes to show how significant a drop-off there is (in the minds of consumers) in the importance of gifts for family versus friends. A partial explanation could be that many friends have explicit agreements not to buy Christmas gifts for each other.

That said, this still ranks as the third highest holiday spending category in the National Retail Federation's 2010 survey.

Decorations

(RBerteig)

Next on the spending chart is holiday decorations, which will consume roughly $41.51 of the typical budget this season. This is a fairly broad and wide-ranging category, encompassing such purchases as:

• Christmas lights
• Stockings
• Mistletoe
• Ribbons
• Snowflakes
• Gingerbread houses

Stock up on even a few of these items (nevermind all of them, as many households do) and it's no surprise that north of $40 is spent on holiday decorations each year.

Gifts For Co-Workers

(jimmiehomeschoolmom)

Next, we come to the holiday spending category that many Americans openly dread: gifts for co-workers. Workplaces around the country will soon be hosting awkward "Secret Santa" contests and half-hearted gift swaps among employees, many of whom would rather skip the entire exercise completely. Ultimately, though, workplace decorum wins out, and explains why $18.26 per year are spent on small gifts for bosses and co-workers.

No matter how high holiday debt climbs, it is rarely (if ever) because consumers overspent in this category!

Greeting Cards & Postage

(Robert S. Donovan)

Surprisingly, even in the age of e-mail, Facebook and Twitter, Americans still expect to spend $26.10 this year on greeting cards and mail postage. Despite technology, these numbers suggest that many people still value a hand-signed card over one that arrives in their inbox. A similar expenditure of $16.86 will be made on flowers (many of which will likely be sent through the mail and contribute to postage costs.) "Other gifts" make up the remaining $34.82 of the typical budget.

Where Debt Comes From

As you can see, there are not endless ways to rack up holiday debt. It is nothing more and nothing less than overspending in one or more of these categories. Knowing this, it is completely within your power to not go into debt this year. Just set a budget: both an overall figure, and an amount for each category. Then do your best to avoid spending more. It really is that simple!