Americans are under financial stress as the holidays approach, with 38% saying this is the first year they’re worried about how they’re going to afford gifts this season. What’s more, two-thirds say the holidays have become more financially stressful than joyful.
A new study from Clever Real Estate examines how consumers are holiday shopping in this uncertain economy. It found that many Americans face multiple economic headwinds, from inflationary pressures to tariff-related price increases. They’re adjusting accordingly, with 54% of respondents saying they are cutting their holiday budgets compared to last year.
Nearly 1 in 10 Americans say they plan to do zero holiday shopping in 2025, with half of those people saying they’re forgoing shopping because they can’t afford it.
“For this year, it’s completely OK to say no or opt out of gift exchanges,” said financial expert Shinobu Hindert. “A potluck or simple get-together can be just as meaningful without the financial pressure.”
High Prices and Sinking Prospects
Americans are feeling squeezed right now. Wage growth seems frozen — with some workers turning to side hustles — and many are realizing they can’t afford their house, let alone gifts. Fifty-five percent of survey respondents said they’re worried about money heading into the holidays, and 41% said their finances were not better than they were in 2024
Americans say they’ll spend a median of $550 on gifts this year — down $50 from the $600 they spent in 2024. However, proper planning can help buoy holiday budgets, financial experts said.
Taylor Price, a financial planner who posts as Priceless TayPrice, tells her clients to set up a holiday fund in January and automate at least $50 a month into it. “By December, you’ve got $600 to spend guilt-free without touching your regular budget or racking up credit card debt,” she said.
Of the 54% of Americans who are cutting back on holiday shopping, 55% said it’s because inflation has made products too expensive. Of the 46% of Americans who say they intend to spend the same amount or more on gifts this year, nearly half of those people say it’s only because inflation has increased costs.
Interestingly, 27% of Americans who said they are cutting back on holiday spending said they would be hurt if their friends and family spent less on gifts for them.
“Always remember, real loved ones care more about your presence than your presents,” Price said. “Holiday spending shouldn’t be a financial emergency.”
Americans Blame Trump, Tariffs for High Prices
Imported toys, clothing, electronics, and other goods will likely cost more this year because of tariffs. About 71% of Americans believe retailers are passing the full cost of tariffs on to consumers, with 72% saying tariffs will make this the most expensive holiday season yet.
Of those who are cutting back on holiday spending this year, 38% of respondents said it’s because tariffs have made products too expensive.
When it comes to who’s responsible for high prices this holiday season, Americans mostly pin the blame on Trump. Thirty percent of respondents blame the current administration for the expensive holiday season, while only 12% blame the former Biden administration.
Suboptimal economic conditions, however, aren’t the only reason many are struggling, said Priya Malani, founder and CEO of Stash Wealth.
“I’m a big fan of controlling what you can control,” Malani said. “I don’t let clients slip into a victim narrative. Every generation has its version of ‘the economy, inflation, tariffs.’ It’s all real, but it’s not the reason most people blow their holiday budget.”
She stresses that holiday budgeting starts earlier in the year and recommends consumers estimate how much they’ll need for holiday shopping, divide it by 12, and save that much each month.
“It’s not fancy, but it works,” Malani said. “And it’s the difference between feeling in control and feeling behind.”
Many Are Determined To Spend Normally
A lot of Americans are intent on defying prices and budgets, with 44% saying they’ll spend whatever it takes to make people happy. That approach comes with anxieties, though. About 40% of millennials and 37% of Gen Z are worried they’ll go into debt because of holiday spending.
Some Americans have accepted debt as the price of holiday shopping, with 14% planning to use buy now, pay later programs, and another 14% saying they’re going to use a credit card they know they won’t be able to pay off on time.
Although Americans have many thoughts about holiday spending, many approach the season with little or no planning. A third of Americans say they don’t follow a budget while holiday shopping. As a consequence, nearly two-thirds say they’ve overspent during the holiday season.
Holiday Pain Can Be Avoided by Planning, Experts Say
Three-fourths of Americans say they wish there weren’t so much pressure to spend for the holidays, but many financial experts stress that their ability to spend shouldn’t determine whether they have a good holiday season.
Hindert said having a specific plan protects shoppers from themselves and allows them to buy at the optimal moment for the best price.
“Track prices before you buy,” Hindert said. Holiday prices tend to fluctuate, especially in the final stretch before Christmas. “When you stick to your list, you avoid impulse buys and debt that follows you into the new year.”
