Three California cities have biggest holiday budgets
Three California cities — Milpitas, Sunnyvale, and Mountain View— are ringing in the season with some of the biggest holiday budgets in America, according to Wallethub,
With last year’s holiday spending having increased 8.3% despite the COVID-19 pandemic, the personal-finance website WalletHub today released its 2021 Holiday Budgets by City report, as well as accompanying videos and expert commentary. It also released its free tool that calculates personalized holiday budgets for all WalletHub members between now and Dec. 25.
To help consumers avoid post-holiday regret, WalletHub used several key metrics, such as income, age and savings-to-monthly expenses ratio, to estimate the maximum spending amounts for consumers in each of 570 U.S. cities.
The following are some highlights from the report:
Cities with the Biggest Holiday Budgets
1. Flower Mound, TX ($3,427)
2. Sunnyvale, CA ($3,085)
3. The Woodlands, TX ($3,073)
4. Sugar Land, TX ($3,029)
5. Mountain View, CA ($2,959)
6. Ellicott City, MD ($2,950)
7. Naperville, IL ($2,941)
8. Bellevue, WA ($2,927)
9. Carmel, IN ($2,806)
10. League City, TX ($2,778)
11. Milpitas, CA ($2,710)
12. Allen, TX ($2,688)
13. Pearland, TX ($2,669)
14. Maple Grove, MN ($2,577)
15. Cary, NC ($2,541)
16. Troy, MI ($2,524)
17. Plymouth, MN ($2,499)
18. Arlington, VA ($2,434)
19. Newton, MA ($2,399)
20. Columbia, MD ($2,379)
More from WalletHub
What tips do you have to help people avoid holiday overspending?
“To avoid overspending, it might be easiest to use a commitment device. I would recommend either putting your allocated budget on a prepaid VISA or holding it in cash (separate from any other cash you might carry). In this way, your holiday spending account is very salient and separate from your other funds. When you run out, if you try to overspend, you have to consciously acknowledge that you have depleted your budget which should add enough friction to the decision to stop some people from violating their goal.”
— Jared Watson – Assistant Professor, New York University
“Set a budget for how much you are willing to spend on holiday-related purchases. This should include all gifts, as well as the costs of mailing them, decor, and meals. Additionally, set aside 15% of that budget to cover incidentals or clothes and stick to that amount. If you have had a reduction in income, you may need to be on a more restricted budget than usual for the holidays and that is okay. Avoid making holiday purchases on credit cards. Instead, withdraw or set aside your budget from available funds so that you will not be tempted to overspend.”
— Kate Andrews – Faculty Member, Doctor of Business Administration program, Walden University
How do you think the current social and economic environment is influencing household holiday spending decisions?
“The past 20 months have seen a proliferation of online shopping due to the pandemic. It would have probably taken a decade to get to the spending levels we see today without the pandemic. This means that we have more options and more information to shape our decisions than we do in the traditional brick-and-mortar purchase situations which means marketers have more diverse tools at their disposal to influence consumers. Our current social environment has led to some level of monotony and routine in our days, so we can expect some desire from consumers to use the gift-giving occasions as an opportunity to do something ‘special’ with more novel or fancy gifts. At the same time, our economic environment has led some Americans to be more frugal, creating a countervailing force to wowing someone with their gifts. My sense is that we will see more unique or novel gift segments thrive (e.g., handmade products) but not necessarily more expensive.”
— Jared Watson – Assistant Professor of Marketing, New York University
“The holiday season is supposed to be a season of giving. Supply chain disruptions have led to shortages and price increases across the board and most people feel like they are in a survival mode and need to think about themselves. It is not that bad! Our trade supply chain is over $2T and COVID knocked the winds out of it for over 12 months. That big a supply chain with many actors will take some time to settle down. Yes, we live in the age of instant gratification but no, the supply chain will not fix overnight. Just like a patient, give it time to heal and try not to overload it so recovery takes longer. In this holiday season, let us try to find that single thread that will reunite us as a country – the thread of taking care of our neighbors and the thread of giving, and the thread of ‘us’.”
— Hitendra Chaturvedi – Professor, Arizona State University
How can people show love and appreciation over the holidays without spending money on gifts?
“The key is focusing on creating experiences that allow family/friends to relax and enjoy each other’s company without the burden and stressors of consumerism. Depending on weather constraints, this can include organizing or hosting fun low-cost experiences such as a picnic or indoor games afternoon/night. A quick search online will provide a raft of ideas for different age groups and contexts. Instead of gift-giving, get everyone to bring along a food/beverage item, which could even be packaged into single serves. Create a suitable music list and then sit back and enjoy the opportunity to create shared memories.”
— Fiona Newton – Department of Marketing, Monash Business School, Monash University
“Love and appreciation can best be shown by thoughtfulness. This can be done without spending money on gifts. In fact, it can be enhanced by not spending money. Giving services and the gift of time are heartfelt options. Think about giving a calendar for the next month or year with notations of services you can do for the recipient. Services can be large or small and show individualized care. Time is a valuable asset and can be much appreciated.”
— Barbara L. Stewart, Ed.D., CFCS – Professor, University of Houston
- Highlands Ranch, Colorado, has the lowest expenses-to-income ratio, 59.47 percent, which is 1.7 times lower than in Miami, Florida, the city with the highest at 99.55 percent.
- Sioux Falls, South Dakota, has the highest savings-to-monthly expenses ratio, 689.29 percent, which is 3.4 times higher than in Waterbury, Connecticut, the city with the lowest at 200.44 percent.
To view the full report and your city’s rank, click here.
- Piggy bank: Shutterstock