Americans Spending Less On Back-To-School
Average shopping spree falls for second consecutive year
For Immediate Release: August 15, 2002
ROCKVILLE, Md. — For the second straight year, Americans will spend less on back-to-school purchases. According to the annual Back-To-School Survey conducted by Myvesta, a financial health center, the average back-to-school shopper will spend $4,144 this year, down 17.5 percent from $5,033 in 2001 and 23.5 percent from $5,423 in 2000.
"With a crawling economy and job uncertainty on the minds of many Americans, it's not surprising that most people are spending less this year on back-to-school expenses," said Steve Rhode, president and co-founder of Myvesta.
According to Rhode back-to-school spending is part of the "trifecta of debt," which also includes vacation spending and holiday shopping. Back-to-school shopping is the largest expense of the three. In comparison, the average vacation this year cost $2,172 and the average holiday expenses in 2001 were $773.
"People plan well in advance for vacations or the holidays, but back-to-school expenses are often an oversight," Rhode said. "Back-to-school expenses aren't typically planned for, and many people aren't realistic about how much they actually spend."
During the August survey, 1,000 people were asked about back-to-school shopping expenses for themselves, members of their families or others. The average spending in each of seven categories includes:
|
Electronics: $398 in 2002, $532 in 2001 |
Dorm Room Supplies: $230 in 2002, $449 in 2001 |
|
Clothing: $518 in 2002, $516 in 2001 |
Desk Supplies: $151 in 2002, $156 in 2001 |
|
Fees: $1,905 in 2002, $2,466 in 2001 |
Transportation: $1,249 in 2002, $1,142 in 2001 |
|
Sporting Activities: $275 in 2002, $254 in 2001 |
Total for back-to-school: $4,144 in 2002, $5,033 in 2001 |
The most significant decline in back-to-school spending was in dorm room supplies. Spending on items for dorm living will drop 49 percent, from $449 in 2001 to $230 in 2002. Other significant changes include a 25 percent drop in electronics purchases and a 23 percent drop in fees. Spending in other categories remained relatively unchanged.
"These survey results could be bad news for many retailers who have seen slow sales so far this summer," Rhode said. "We have to hope that the consumers' optimism to cut their spending becomes reality. However, in uncertain times such as we've had since September 11th, people overestimate their ability to cut back. The truth is, they spend more than they planned.
"Without proper planning, school expenses can lead to big problems for families down the road. The holidays will be here soon, and if a family is still carrying the balances of back-to-school shopping on their credit cards, the holiday season might just add to even larger credit card debts."
If this year's average back-to-school expenses of $4,144 are charged on credit cards and only the minimum monthly payment is made, it will take 43 years to pay off and cost an additional $11,364 in interest payments. That calculation uses an 18 percent interest rate and a monthly minimum payment of 2 percent.
"Back-to-school shopping doesn't have to be a burden on yourself, or your family. If you do need to charge your back-to-school expenses, develop a plan to pay them off in the least amount of time. By sending the maximum amount that you can afford to pay each month, and never reducing the amount you do pay, you can have that debt paid off quickly," Rhode added.
# # #
MyvestaSM is dedicated to helping people create healthy financial lives. The organization provides a wide range of materials to inspire and inform people so that they can break down their barriers to financial and personal success. For more information visit Myvesta.org online.
