We put our money where our mouth is when it comes to New Year’s resolutions.
New analysis from Earnest shows spending in “vice” categories like alcohol, fast food, and beauty spikes in December, followed by an uptick in spending on “virtue” categories like health clubs and diet foods in January.
A Change in Spending
After the bacchanal that is the December holidays, an estimated 44% of Americans attempt to right the ship by making New Year’s resolutions. According to a survey by Marist, resolutions will range from the subjective (“be a better person”) to the quantifiable (“lose weight”, “spend less money”).
While the trend might feel intuitive, we wanted to see what the actual shift in consumer spending looked like. To do that, we examined how spending in the 2015 holiday season was impacted by New Year’s Resolutions in January 2016.¹
First, we looked at the relative popularity of seven spending categories that run the gamut from virtue to vice. In the table below, we show the percentage of users who reported spending in each category and calculate how it changed after the holiday season wrapped.
The fast food category included at least more than 12 popular chains, including McDonald’s, Wendy’s, Domino Pizza, Taco Bell, and Starbucks. Our diet food category included both set-meal food providers and diet systems, such as Weight Watchers, Jenny Craig, Freshly, and Blue Apron.
Of the four spending categories that dropped in popularity between December and January, three are in our vices category. In December, nearly 20% of us spent on booze, but that figure dropped by a quarter in January. This could reflect participation in detox efforts like Dry January, as well as the simple fact that we party less after New Year.
Vanity and gluttony were more popular in December, too: with appearances to make at holiday parties, more of us spent at salons, and holiday shopping trips meant more fast food dinners.
In contrast, the most virtuous categories saw gains in popularity after the holidays (even though they remained least popular overall). In January, the percent who spent on diet food doubled, and 10% more invested in gym memberships.
We also looked at the average amount spent among users who reported purchasing in each category. The results are tabulated below, with a column to indicate how spending changed after the end of the holiday season.
We saw the biggest drop in spending on purchases from Amazon.com. Not surprising, given that more than half of U.S. shoppers rely on the site for holiday gifts.
The vice categories alcohol, salons, and fast food also saw sizeable spending drops after the holidays. While we may over-indulge in December, we cut back overall in January. Accordingly, diet food was the only category that saw an increase in spending after the holidays.
Though more people made it to the gym in the new year, the average amount they spent there decreased in January, albeit by $1. This slight drop could be the effect of gym membership specials intended to lure folks with fitness-centric resolutions.
¹Earnest’s analysis is based on the anonymized responses of tens of thousands of loan applicants.