Financial literacy

Study: The Average Renter Household Needs $549 in Savings for the Holiday Shopping

Ideally, the holiday season should be all about giving. Realistically, however, — well, it’s still all about giving, just not exclusively in the merriest sense of the word… Buying gifts, decorations and festive dinners toward the end of the year is a painful addition to everyone’s budget, but these extra holiday expenses put a strain on renters in particular as they typically have much lower incomes — about half that of homeowners.

Here’s what a quick reckoning of the average renter household’s holiday budget looks like

The simple calculation above captures the pre-holiday season panic that many of the nation’s renters face. The numbers are based on the median renter household income according to the U. S. Census Bureau, November’s average rent according to Yardi Matrix, average cost of living data from the Bureau of Labor Statistics, and a survey conducted for the National Retail Federation that reveals how much American consumers plan to spend on average this holiday season. Based on this data we’ve concluded that the average American family of four spends about 2.8% of their annual income on winter expenses. We also wanted to see, however, how our hypothetical family of four would do in the 50 largest cities, based on the local incomes and rents.

So How Will Your City’s Average Renter Family Close the Year?

Let’s take the Vincents, who happen to be the embodiment of the average family in Virginia Beach, VA. This family of four lives in an average neighborhood, they get around in an average car, and have an average dog. But most importantly, Mr. and Mrs. Vincent earn exactly the local median income for renter households, their monthly rent is bang on the local average, and they want nothing more than to make their children’s wish come true this season, which is — unsurprisingly — an average winter holiday. The Vincents are among the luckiest of the lucky few that can afford to do this without going near their savings account or taking their credit card out of their wallets. They will even have $689 left of their November and December salaries to put in the rainy day fund, or — why not — change their minds and go for an above-average holiday after all.

So with the financial challenges of Black Friday and Cyber Monday tackled successfully, the Vincents are looking forward to a cheerful holiday season. So are numerous other average families in 24 other large US cities, including Wichita, KS and Tulsa, OK, and Oklahoma City, OK where average renter households can expect to have $500 or more for the piggy bank after the holidays, but also in Tucson, AZ, where the Tucker family will have to make do with a modest $6. But at least they don’t close the year with a hefty debt…

…Like the Manning family is likely to do in Manhattan, NY — to jump straight to the other extreme. Unless they have $4,394 in savings just for this year’s winter holiday, they will need some serious outside help to pull through the season. So do the Boltons from Boston, MA, who will most probably charge their credit cards with $4,014 by the end of the year, and numerous other renter households in 26 other large cities across the nation. California has a strong presence on this list, with 6 contenders in the top 15 cities where the holidays cause the most financial trouble for renters.

Original source:


  • This analysis covers the 50 largest US cities by population.
  • All calculations were based on November’s national and local average rents for multifamily rental communities with 50 or more units, as provided by Yardi Matrix.
  • For the income figures, our analysts used the past 12 months’ median renter household income values according to the 2012–2016 American Community Survey 5-Year Estimates, at national as well as city level.
  • To estimate the average household’s holiday-related expenses, we used the National Retail Federation’s 2017 holiday spending forecast, adjusted to households with two earners by doubling the amount spent on gifts and considering the non-gift purchases and other holiday-related expenses to remain unchanged regardless of the number of earners per household. The sum obtained this way ($1,575) represents 2.8% of the median household income at national level ($55,322 as defined by ACS). Ultimately, we applied the same percentage to the median renter household income in each city.
  • The cost of living was calculated in all cases based on 2016 stats released by the Bureau of Labor Statistics, which include all expenses related to food, transportation, healthcare, personal insurance and pensions, entertainment, and all other expenditures. We only adjusted the annual food costs in order to exclude the amount spent on festive foods (which is part of the winter holiday-specific expenses). The cost of living obtained this way represents 46% out of a household’s gross income (before taxes), and we considered the same proportions to be valid for each city.
  • As the holiday-related expenses were calculated for the last two months of the year, we also adjusted all other indicators to reflect two months’ values.


All sums generated using the calculator are provided for informational purposes only, and should not be interpreted as financial advice. You should not act or refrain from acting on the basis of any content generated through this tool without seeking professional financial advice. The content generated this way contains general information, which may not accurately reflect the current market conditions or address your specific situation. We disclaim all liability for actions you take or fail to take based on the results obtained using this calculator.


Olha graduated from Brigham Young University - Idaho. She joined PocketGuard in 2022 as a digital marketing manager with a strong background in product marketing. Olha is focused on brand awareness ...

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