Holiday shopping is always stress-inducing, but it will be more so than usual this year as we’re amidst a surging coronavirus pandemic.
With COVID-19 impacting many people’s finances, holiday shopping budgets could be drastically cut back from what they normally are. However, WalletHub, a personal finance website, says merchants are optimistic and believe that holiday sales will increase “somewhat” or “significantly” compared to 2019 with a large uptick in online shopping.
In order to help shoppers make smarter financial decisions this holiday shopping season, WalletHub has created maximum holiday shopping budgets for all 570 cities in the United States.
Two Massachusetts cities ranked in the top 20 overall listing of holiday budgets including Newton, which ranked fifth with a $2,768 budget and Cambridge, which ranked 19 with a $2,414 budget.
To determine the budgets, WalletHub compared the 570 cities across five metrics including income, age, debt to income ratio, monthly income to monthly expense ratio and savings to monthly expenses ratio.
According to WalletHub, “our algorithm considers a consumer to be in a comfortable financial position to engage in holiday spending if they have: 1) enough emergency savings to cover at least six months of expenses and 2) a debt-to-income ratio smaller than 22 percent for a renter or 43 percent for a homeowner. Depending on a city’s specific characteristics, the algorithm adjusts upward or downward to create a custom estimate.”
You can view the entire list of holiday budgets by city here.