Average Holiday Gift Spending Falls to $880 as Families Trim Costs

The average consumer intends to spend roughly $880 on holiday gifts this year, marking a 21% drop from the slightly higher figure of over $1,100 recorded in the previous holiday season.

NerdWallet’s latest report attributes this reduction to widespread inflation and rising costs across multiple sectors. Kim Palmer, a personal finance expert at the firm, noted that these financial pressures are compelling households to reduce travel budgets and remain closer to home while shopping.

Palmer identified financial stress as the primary driver of this behavior. “The really big underlying story is that people are stressed out financially because prices have been rising across so many consumer categories, and so people are really forced to think, OK, how can I cut back while still celebrating the season,” she said. “And so, people are doing that by spending less overall.”

To manage costs, Palmer advises shoppers to create lists early and distribute purchases over several months rather than concentrating buying in December. She also warned against relying heavily on buy now, pay later services. “We found that people are turning to buy now, pay later, where you can spread out payments over several months,” Palmer said. “Of course, it’s a little bit risky because it’s a form of debt and you have to pay it back eventually, so that can be difficult once January hits.”

The expert further suggested tracking specific items to purchase them when prices dip closer to the holidays. She emphasized avoiding the use of emergency savings, sticking to predetermined lists, and resisting impulse purchases to maintain financial stability.

The report indicates that consumers are actively adjusting their strategies to balance seasonal celebrations with tighter household budgets in the coming months.