Updated: Apr 18
It’s the season of love. But for many Americans, it’ll come with a hefty price tag.
Of U.S. adults in relationships, 70 percent plan to spend money on their partner this Valentine’s Day, with the average amount being $152. For Millennials, the number jumps to $208. That’s according to Bankrate’s 2020 Valentine’s Day survey, which polled 1,485 individuals with significant others nationwide about their spending expectations for Feb. 14 on anything from food to entertainment, and of course gifts.
Americans aren’t afraid to spend a pretty penny to celebrate their romance during this season. Across the U.S., spending is expected to reach $27.4 billion, up 32 percent from last year’s projections, according to the National Retail Federation’s 2020 forecast.
But while experts say the holiday is an understandable — and necessary — part of any healthy relationship, it may be difficult to avoid overspending amid extensive advertising and social pressures. It’s pertinent, however, to be wary of busting your budget for one holiday alone.
“There’s an adage that you can’t truly love someone else until you love yourself,” says Mark Hamrick, Bankrate’s senior economic analyst. “The same holds true with managing one’s personal finances. A relationship will not be sustainable if one is overspending with a prospective love interest, likely in part because one’s own spending is out of control.”
Millennials driving Valentine’s Day spending
When it comes to individual Valentine’s Day plans, Millennials are leading the charge. According to Bankrate’s nationwide poll, 75 percent of individuals in this generation plan to spend money for the holiday. That’s higher than any other age group and a bit above the national average.
Overall, U.S. adults between the ages of 24 and 39 report that they’re expecting to dish out $208 for Feb. 14, compared with the $152 reported by the typical adult. That amount is also higher than their older counterparts, with $160 for Generation X, $101 for Baby Boomers and $43 for the Silent Generation.
Not only are Millennials more likely to spend the most, they’re also expecting their partner or spouse to spend the most on them. The typical adult believes an average of $102 will be spent on their Valentine’s Day gift or experience. For Millennials, however, that total jumps to $153, compared with $93 for Gen Xers and $55 for Baby Boomers.
Key reasons for generational divide: Relationship length, social media
What’s driving the generational divide on spending? Younger adults are more likely to be in newer relationships, meaning Millennials may feel pressure to spend more to impress their partner, says Megan Gorman, founder and managing partner at Chequers Wealth Management.
“It’s part of courtship,” Gorman says. “Millennials are still dating, they’re getting married later or are in the early stages of their marriage. For them, spending on this stuff becomes more important.”
That corresponds with Bankrate’s survey findings, which showed that those who have been in longer relationships tend to spend less on their spouse or partner than those who are in newer ones.
Couples who have been together for less than six months, for example, expect to spend $700 this Valentine’s Day. That compares with $453 for those who have been together between six months and less than two years, and $157 for those who have been together for between two years and five years, according to the survey.
Social media and the internet may also be pressuring Millennials to spend big bucks, Gorman says. Sites such as Facebook, Instagram and Snapchat come with an inherent pressure to impress friends and followers. At the same time, retailers may be influencing shoppers through frequent advertisements and online ads, including sponsored posts from celebrities.
But the broader economy could also be a reason for upbeat participation in general, says Katherine Cullen, senior director of industry and consumer insights at the National Retail Federation who leads its annual Valentine’s Day forecasts.
Wage growth and a low rate of joblessness are feeding back into consumers’ pocketbooks, boding well for consumer spending. During recessionary periods, for example, American consumers aren’t as willing to spend as much, Cullen says.
Overall, Valentine’s Day comes in as the sixth highest in terms of spending on a holiday per American, she says.
“It’s an environment that’s conducive to consumer spending, and that helps play out in events like Valentine’s Day,” Cullen says. “When people feel good about their individual situation and their own paychecks, it’s easier for them to spend a little bit more on something for a loved one, such as a night out or a box of chocolate for friends.”
But avoiding overspending is crucial for Millennials, a generation buffeted by trillions of dollars in student loan debt. These individuals may not be in the financial position to chalk up as much money as they want to, Hamrick says.
“I’d suggest that younger individuals try to reduce expectations, indeed, to lower their spending on Valentine’s Day-related activities,” Hamrick says. “It can be detrimental to blow the budget on dating at a time when career trajectories are still being established and incomes are not yet as high as they might be down the road.”
Bankrate’s 2020 Valentine’s Day survey also highlighted differences between men and women. Men expect to spend an average of $187 on their partner or spouse, and they expect $111 to be spent on them. At the same time, women expect to spend $118 on their partner, while $93 are thought to be spent on them.