Whether we’re ready for it or not, holiday shopping season is underway, but a growing number of Americans are expecting to give (and receive) fewer physical gifts this year, some opting instead to find the gift in quality time with those they love.
As inflation remains stubbornly set at 3.7 percent, Americans have reported spending cuts in a wide array of areas.
Shoppers generally spent less on clothing (63 percent), restaurants and bars (62 percent) and entertainment outside the house (56 percent) this year, according to a CNBC survey spanning more than 4,000 U.S. adults. Groceries, vacations and electronics also got significant cuts.
Now, more than one in three shoppers (36 percent) indicated they would rather have an experience with their loved ones instead of exchanging gifts at all, according to NerdWallet’s 2023 Holiday Shopping Report. Additionally, around three in 10 holiday shoppers indicated they’d prefer to receive fewer gifts this year, and 26 percent plan to discuss holiday gift spending limits with their friends and family,
And it’s likely these money trends will continue on into the holiday season. Roughly 75 percent of Americans said they would be cutting back on non-essentials over the next six months, the CNBC report found.
The severity of the spending cuts will likely depend on Americans’ household income. More than half of those earning $50,000 or less said they were feeling the impact of the economy on their personal finances, while 46 percent of households making more than $100,000 said the same in the CNBC poll.
Holiday Spending in 2023
On average, Americans plan to spend $831 on holiday gifts this year, according to the 2023 holiday spending report that polled more than 2,000 U.S. adults. That constitutes more than $184 billion in total.
Despite the plans for big spending, a large number of Americans still have debt from last year lingering over their heads. Roughly half incurred credit card debt when holiday shopping in 2022, and 31 percent have still not paid it off.
The growing debt could only get worse as 74 percent of Americans plan to use credit cards on holiday gifts this year as well.
Still, those cognizant of the constraints of inflation will not be buying as many gifts as in years prior, with 56 percent of shoppers indicating they won’t be able to buy as many as they’d like due to inflation, NerdWallet found.
Shoppers had various strategies for how to reduce spending this holiday season.
Forty percent of consumers opted they would straight up buy fewer items, while 21 percent said they’d seek out cheaper brands and 41 percent planning to use coupons, sales and other discounts, yet another survey from Bankrate found.
Do-it-yourself gifts also might gain prominence, with 17 percent indicating they plan to give these types of presents. Shopping earlier could also become the norm, with 27 percent of consumers planning to start shopping earlier than in previous years.
Strategies for Savings
In a public budgeting Facebook group, many consumers have theorized the best ways to go about saving money during the holiday season. And some Americans are opting to drop holiday gifts altogether.
“This year it’s zero,” a user called Christine Long Scollick said of her holiday spending budget. “Nobody in my family wants to exchange gifts other than jams, jellies and soups that we canned this year.”
Meanwhile, others have added on an extra layer of flexibility due to high inflation.
“I know what I will spend,” another budgeter Terry Horbert wrote. “I have a large family and half of them have opted out of any gift giving this year, which is fine. But, I have sinking funds for all holiday spending, so I won’t be caught off guard. I also have a sinking fund for the Thanksgiving meal, which can be up to $250. I’m adding an extra $50 to that due to inflation and the high cost.”
While inflation has some planning to spend more, others remain committed to staying frugal even throughout Thanksgiving and Christmas.
“I set aside money from each paycheck until November 1,” Facebook user Adrianna Lisa said. “I know some people who are upping their budgets for inflation but because of inflation I am more determined to stay at or under budget.”