Americans plan to spend an average of $985 on holiday-related items in 2023, which is less than the $1,006 reported in 2022.
But average spending on gifts is expected to be higher, with an average of $654 in 2023.
The overall decline in spending money through the holidays is due to an expectation to spend 16% less on holiday-related non-gift items.
It is no secret that the most wonderful time of the year is often the most expensive time of the year. Although holiday spending can add up quickly, a recent survey found that consumers plan to spend less this year on holiday gift spending.
We will explore the holiday trends for 2023 and how you can make the most of your personal finances this holiday.
This year, consumers plan to spend $985 on holiday-related items.
Americans Are Spending Less This Holiday Season
According to a recent survey from the Conference Board, Americans are planning to spend less this holiday season. This year, consumers plan to reduce holiday expenses and implement holiday savings strategies, planning to spend $985 on holiday-related items. That’s down from the reported gift list spend of $1,006 in 2022. While this is the average, it doesn’t tell the whole story.
Holiday Spending Trends 2023
Be it at the malls or shopping online, some consumers are planning to spend less with smart holiday shopping, while others are planning to spend more. Below is a breakdown of the different spending expectations:
- Non-gift spending is expected to be less: Consumers are expecting to spend $330 on holiday-related non-gift items on family and friends in 2023. That’s down from $393 in 2022.
- Gift spending is expected to be more: Consumers plan to spend an average of $654 on holiday gifts, which is 6.7% higher than the $613 spent last year.
- Consumers under 45 are planning to spend more on gifts: On average, consumers aged 35 to 44 are planning to spend $993 on gifts this year, which means this group is spending the most on holiday gifts. But older consumers are planning to spend considerably less, with those over 65 planning to spend $545 on gifts this season.
U.S. consumer spending by year shows that overall gift spending hasn’t quite recovered from the pandemic. In 2019, consumers planned to spend an average of $675 on holiday gifts. After falling in recent years, consumer spending expectations have increased for 2023 to $654 on gift spending. But that’s still below the peak seen in 2019.
How to Manage Your Holiday Spending
Holiday finance management threatens to put a damper on the spirit of the season. But implementing a few strategies can help you save this season. Explore some ways to manage the financial cost of the holidays below:
- Potluck dinners: The holidays are filled with time around the table. Consider potluck dinners, where everyone brings a dish, to spread out the cost of the meal.
- Coupons: The right coupons could help you save on your holiday dinner and gifts.
- Watch the sales: The holiday season is full of sales, which can help you snag great gifts without breaking the bank.
- Build savings: With the holidays around the corner, consider tucking away any extra funds you have available to cover holiday costs.
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How to Prevent Financial Stress Around the Holidays
If you feel the pinch of finances around the holiday season, consider the following strategies to prevent stress.
- Get clear on your holiday priorities: Take time to manage holiday costs and decide what’s most important to you this holiday season. It might be getting your family the best gifts, hosting an amazing friends and family dinner, or traveling to spend time with loved ones. With a clear priority, you can focus your spending to make that happen. But bare in mind that travel expenses can weigh down, too.
- Build savings in a high-yield savings account: A high-yield savings account is an ideal place to stash your savings. As you tuck away funds, the account will help you build your savings through interest earnings. Open a high-yield savings account to start your journey.
Save every month: The holidays only come around once each year. But you can make saving for your holiday spending a part of your budget each and every month.
- Don’t lean on credit cards: It’s tempting to put your holiday purchases on a credit card. But if you cannot afford to pay off your credit card balance in full, it might be better to stick to debit cards, or skip the purchase. Otherwise, you’ll be stuck paying off the purchase and interest charges.
- Buy gifts all year: One way to space out holiday costs and avoid holiday financial stress is to purchase gifts all year round. I enjoy snagging gifts throughout the year for my family, usually when I spot a great sale. It can help you avoid the difficulty of spending hundreds of dollars on gifts in one month.
The Bottom Line
The holiday season is upon us. If you are planning to spend big this holiday season, get clear about what purchases matter the most to you. As you prepare for the season, consider high-yield savings for holidays, with opening a high-yield savings account to put your savings to work.