A survey from CNBC showed that around a quarter of millionaires said they would spend less this year compared to the 2019 holiday season.
CNBC’s Millionaire Study revealed that 65% said they would spend about the same amount and 12% would spend more.
The survey, held in November by Spectrum Group on CNBC’s behalf, asked 750 participants with $1 million or more in investible assets.
For 2020, 27% of the respondents said they would spend less than $500, an uptick of six percentage points from 2019.
Their reason for lower holiday spending in 2020 is associated with the ongoing health crisis. More than 80% of the millionaires admitted they are concerned over the pandemic and its impact on health than their financial situation.
“They have money to spend and they can’t spend it,” said certified financial planner Cathy Curtis, founder and chief executive officer of Curtis Financial Planning, an Oakland, California, firm that specializes in the finances of women and their families. She explained that, for many, travel did not happen this year. That is affecting the holidays, especially for those that do not have a local family.
For over 40% of U.S. households, income remains below pre-pandemic levels, based on a recent Bankrate survey of 2,750 adults.
Those numbers are affecting holiday spending. About 1 in 3 people plan to not spend on gifts altogether because of Covid, according to WalletHub’s 2020 Holiday Spending Survey. Moreover, almost 102 million consumers would spend less this year on the holidays than they did in 2019.
The coronavirus pandemic is said to have affected those who are not able to afford much, including those who lost their jobs, low-income workers, and people of color and women.
Meanwhile, millions of Americans are waiting for Congress to pass another coronavirus relief bill to extend unemployment insurance or a ban on evictions and distribute another round of stimulus checks in 2021.
As for the findings of the Millionaire Study, Curtis found a silver lining: Most of her clients have increased their charitable donations amid the pandemic.
“Because of Covid and the income inequities and the people that are being hurt, a lot of people are giving a lot more money to food banks than ever before because they feel like that’s where they can do the most good,” she said.
Charitable act, volunteerism
New research from Fidelity Charitable suggested that the pandemic motivated nearly half of donors to give notably more in 2020.
More than half of the donors expressed their intention to help affected nonprofits. Most donors (84%) were concerned about small community-based nonprofits trying to survive the pandemic, but only half as many showed concern for bigger national nonprofits.
Findings showed that sixty-five percent of volunteers minimized the time they contributed or stopped volunteering this year because of the pandemic. Meanwhile, 73% of donors planned to volunteer like before when it is safe to do so.
“An earlier Fidelity Charitable study, Communities in Crisis, showed that while granting to human services charities grew during the pandemic, granting to other sectors was stable, and according to this study, almost every donor who gave to a different charity also continued support for all or most of the organizations they had given to regularly,” said Amy Pirozzolo, head of Donor Engagement for Fidelity Charitable. “Donors understand that all charities face unprecedented demands, and giving strategies meaningfully changed.”
