NerdWallet: Average Holiday Gift Budget Falls to $880

NerdWallet reports that the average consumer plans to spend approximately $880 on holiday gifts this year. This figure represents a 21% decrease from last year, when the expected average was just over $1,100.

Kim Palmer, a personal finance expert at NerdWallet, attributes the decline to persistent inflation and higher costs across many consumer categories. She notes that the pressure extends beyond gift purchases, leading many people to reduce travel expenses and stay closer to home for the season.

“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,” Palmer said. “And so, people are doing that by spending less overall.”

To manage the strain, Palmer advises shoppers to create gift lists early and spread purchases over several months rather than concentrating them in December. She also suggests tracking items on those lists and waiting for price drops that often occur as the holidays approach.

Palmer warns against relying on emergency savings for holiday shopping and urges consumers to stick to their lists to avoid impulse buys. She cautions that while some are turning to buy-now-pay-later plans to spread out payments, this approach carries risk as a form of debt that must be repaid once January arrives.