Many Americans are preparing to make sacrifices on everyday necessities in order to fund their Christmas shopping this year, according to recent surveys. Nearly two-thirds of consumers, specifically 65 percent according to a US News survey, plan to reduce spending on essentials to allocate more funds toward holiday gifts.
This trend highlights the financial pressures households are facing as the festive season approaches. Instead of cutting back on luxuries, individuals are looking to reduce spending on everyday items to cover the costs associated with Christmas presents. Elevated prices for groceries, housing, and utilities have left many with less disposable income for holiday expenses.
A separate survey by Thrivent found that 68 percent of Americans intend to cut back in at least one area due to economic conditions, with dining out being the most common area for reduction. Additionally, 32 percent plan to spend less on gifts for family and friends, and 31 percent intend to reduce holiday travel spending.
These spending adjustments extend to gift-buying habits. Two-thirds of those cutting back on gifts stated they plan to buy fewer presents overall, an increase from 56 percent last year. Another 46 percent will buy gifts for fewer people, compared to 37 percent in the previous year, while about half plan to choose less expensive gifts.
Americans anticipate spending an average of $1,011 on holiday gifts, according to a Gallup survey. While this figure is comparable to recent years, inflation means the same amount may not purchase as much as before, potentially forcing sacrifices elsewhere to maintain holiday traditions.
Overall, Americans planning to spend on gifts, travel, and other seasonal expenses expect to spend an average of $2,525. Credit cards are expected to be a significant payment method, with 74 percent of holiday spenders planning to use them. Furthermore, nearly two in five consumers, or 38 percent, plan to utilize buy-now-pay-later services to secure their gifts. However, a substantial portion of these users, 38 percent, do not expect to be able to make their payments in full and on time, suggesting potential financial challenges in the new year.