H&R Block Reports Rising Holiday Spending Amid Increasing Household Debt Concerns in 2024 Outlook on American Life

H&R Block's report reveals rising holiday spending amid increasing debt, especially among younger generations facing financial challenges.

Quiver AI Summary

H&R Block's fourth annual Outlook on American Life report highlights a paradox in the American economy, where rising holiday spending coincides with increasing household debt. Despite financial pressures, 66% of Americans feel optimistic about their income growth and economic stability, yet many struggle with debt, particularly among Gen Z, who feel the heaviest burden. The report reveals that a significant portion of consumers have spent more than they earned in the past year, with 1 in 6 Americans holding student debt and many unable to manage their credit card debt. H&R Block aims to assist clients in navigating financial challenges during the holiday season, emphasizing the need for effective financial management tools and support.

Potential Positives

• This year's Outlook on American Life report highlights that 66% of Americans feel optimistic about their income growth and financial stability, indicating a positive sentiment among consumers that can benefit H&R Block's services.
• H&R Block's commitment to providing tools and guidance to help consumers manage their finances can strengthen customer loyalty and attract new clients seeking financial support during challenging times.
• The increase in holiday spending, exceeding expectations during Black Friday and Cyber Monday, suggests a potential rise in demand for H&R Block’s tax preparation services as consumers look to optimize their financial situations.
• The insights gained from the report allow H&R Block to better tailor its services to meet the evolving financial concerns of different generations, enhancing its market relevance and client support.

Potential Negatives

• Despite reported optimism about income growth, a significant portion of Americans (66%) feel overwhelming debt is a major threat to their financial stability, which could indicate a troubling trend for H&R Block's customer base.
• The findings that one in three Americans are spending more than they earn and that two in three people consider their debt unmanageable suggest a potential rise in demand for H&R Block's services, but also highlight a concerning financial landscape that may affect client retention and satisfaction.
• Particularly concerning is the fact that only 30% of Gen Z avoid making unaffordable purchases, which reflects poor financial decision-making that contradicts H&R Block’s mission to help clients manage their finances wisely.

FAQ

Why is holiday spending increasing despite rising debt levels?

Many Americans feel optimistic about their income growth and buying power, leading to increased holiday spending despite financial pressures.

Which generation is most burdened by credit card debt?

Gen Z feels the most burdened by credit card debt, followed closely by Gen X, Millennials, and Boomers.

What does H&R Block offer to consumers facing financial pressures?

H&R Block provides tools, guidance, and support to help consumers manage their finances and avoid falling deeper into debt.

Are Americans spending more than they earn?

Yes, one-third of respondents across generations reported spending more than they earned in the last 12 months.

Where can I find the full Outlook on American Life report?

The full report is available at www.hrblock.com/outlook-on-american-life/.

Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.

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Full Release

KANSAS CITY, Mo., Dec. 18, 2024 (GLOBE NEWSWIRE) -- Even as rising levels of debt further strain household budgets, and with many Americans already facing financial pressures that could lead to even greater economic challenges in the year ahead, holiday spending is increasing. These findings echo H&R Block’s (NYSE: HRB) fourth annual 2024

Outlook on American Life

report, which reveals that while many generations remain optimistic about their income and buying power, they are simultaneously burdened by overwhelming debt – especially Gen Z.

This year’s report found that most Americans (66%) across income levels and generations feel optimistic about their income growth, retirement prospects, and ability to maintain financial stability. Simultaneously, this theme of optimism is met with the reality that debt and loans are threatening to crush economic momentum for many consumers.

“Following record Black Friday spending, we understand that it can be challenging to make the most of your money while balancing financial responsibilities,” said John Thompson, Vice President of Financial Services at H&R Block. “H&R Block is committed to helping people navigate these pressures by providing the tools, guidance, and support they need to manage their finances wisely and avoid falling deeper into debt during the holiday season.”

A Deeper Look at Americans’ Debt

This holiday season, people are already exceeding expectations set for retail holiday shopping. Online and in-store purchases were higher than expected during both Black Friday and Cyber Monday, nodding to the increase in buying power that Americans of all generations report experiencing.

¹

While holiday shopping is higher than expected, many consumers are feeling the strain of this spending – particularly Gen Z and Gen X.

According to this year’s Outlook on American Life report, Gen X is carrying the most credit card debt (55%), followed closely by Millennials (49%), Boomers (47%), and then Gen Z (39%) – though it’s Gen Z that feels the most burdened. Of those holding credit card debt, as many as two in three people say their level of debt is unmanageable. Further, Gen X’s outlook on their finances and greater economic opportunity conflict with younger Americans, as they are the most likely to be “not at all confident” they’re doing what is needed to meet longer-term goals such as saving for retirement.

Credit card debt isn’t the only factor weighing these consumers down: H&R Block found that 1 in 6 Americans hold student debt, over a third reporting they have more debt than they can manage.

Americans of All Ages are Spending More Than They Earn

In addition to increasing amounts of debt, the Outlook on American Life report found that despite growing income and buying power, a third of all respondents across generations reported spending more than they earned in the last 12 months. Only 30% of Gen Z say they do not buy what they cannot afford (vs. 54% of Boomers, 40% of Gen X, and 28% of Millennials), leading them to make unaffordable purchases that pile onto their credit card debt. Plus, with 1 in 5 Americans agreeing that they wouldn't be able to cover household expenses for a full week without a source of income, there is a clear gap between American spending and earning.

“We recognize that spending, earning, and saving looks unique for each and every person, and it is our goal to help every H&R Block client reach the financial future they deserve,” said Thompson. “The insights gathered from the Outlook on American Life report on how Americans are faring financially allow us to further understand how generations are evolving, and what they’re concerned about, so that we can better assist our clients all year round.”

To learn more and read the full Outlook on American Life report, please visit

www.hrblock.com/outlook-on-american-life/

. To view media assets, including a downloadable report and infographics, visit

https://www.hrblock.com/tax-center/media-kit/outlook-on-american-life-report-media-kit/

.

<sub>¹

“197 Million Consumers Shop Over Thanksgiving Holiday Weekend”, National Retail Federation, https://nrf.com/media-center/press-releases/197-million-consumers-shop-over-thanksgiving-holiday-weekend</sub>

About H&R Block



H&R Block, Inc. (NYSE: HRB) provides help and inspires confidence in its clients and communities everywhere through global

tax preparation services

,

financial products

, and

small-business solutions

. The company blends digital innovation with human expertise and care as it helps people get the best outcome at tax time and also be better with money using its mobile banking app,

Spruce

. Through

Block Advisors

and

Wave

, the company helps small-business owners thrive with year-round bookkeeping, payroll, advisory, and payment processing solutions. For more information, visit

H&R Block News

.

An infographic accompanying this announcement is available at

https://www.globenewswire.com/NewsRoom/AttachmentNg/cc323fae-2274-4d33-80d3-3ec992daeef1

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.