Gas prices are on a steady decline. According to USAToday.com, the Energy Department predicts that next year gasoline prices will average to $2.60 a gallon: the lowest full-year average since 2009. Despite the money saved from reduced petroleum prices, though, Americans are still clinching tight to their money clips this Holiday season. In a report by Bankrate.com, 82% of Americans do not plan on spending more this season even with the extra they’re pocketing from cheaper gas.
Of the 16% who plan to up their Holiday shopping, only 5% report to be doing so because of lower petroleum prices. The findings were consistent across age, education and income levels, but millennials did have the lowest propensity to reserve their spending. Compared to 84-86% of older adults, 71% of millennials said they would not spend more this year. Eight percent of the 28% of millennials claiming to spend more this season credit their increased purchasing to dropped petroleum prices.
Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling, suggests that a large percentage of the 16% who plan to spend more may also be doing so because of “pent-up” demand. “I think that people are probably anxious to begin spending again. I’ve often called it the seven-year itch,” she says in reference to the number of years since the beginning of the Great Recession. She additionally attributes gains in the stock market and overall economy as possible explanations.
Greg McBride, Bankrate.com’s CFA, says, “Despite consumers’ improved feelings of financial security, there is still a prevailing sense of unease when it comes to discretionary spending and the lack of emergency savings.” However, there are some younger adults whose student debt and minimal savings still “won’t hold them back from splurging during the holiday shopping season,” he adds.
Other findings include the 102.0 Financial Security Index, the highest level since March and the third highest reading of 2014. Any reading above 100 signifies improvements in financial security as compared to a year prior, and a reading below 100 indicates a decline in financial security as compared to the preceding year.
Net worth and overall financial situation posted notable improvement, as feelings of job security and comfort level with debt continued to show strength. Overall, men’s feelings of financial security (104.1) indicated improvement within a year while women’s feelings of financial security (99.9) indicated deterioration by the slightest of margins.
The survey was conducted Dec. 4-7 by Princeton Survey Research Associates International. Answers from 1,001 adults living in the continental U.S. were used to conclude findings.