NerdWallet: Average Holiday Gift Budget Falls to $880

Americans plan to spend an average of $880 on holiday gifts this year, according to a new report from NerdWallet.

That figure represents a 21% decline from last year, when consumers anticipated spending just over $1,100 on presents.

Kim Palmer, a personal finance expert at NerdWallet, attributed the drop to sustained inflation and higher prices across various consumer categories.

Palmer said financial stress is forcing households to reduce overall holiday expenditures, including travel, while still attempting to celebrate 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.

She advised shoppers to create gift lists early and spread purchases across several months rather than concentrating spending in December.

Palmer also warned against relying heavily on buy now, pay later services, noting that such methods create debt that can become difficult to manage in January.

Additional recommendations included tracking items on gift lists to purchase them during sales, avoiding the use of emergency savings for shopping, and resisting impulse buys.