Jamie Spencer
As economic concerns linger across the country, American households are grappling with rising costs and financial stress this holiday season. According to the National Retail Federation, holiday spending in the U.S. is projected to reach new highs, with consumers expected to spend between $979.5 billion and $989 billion between November 1 and December 31. Meanwhile, Deloitte’s holiday survey reports that the average American shopper plans to spend around $1,778, an 8% increase from last year. This is despite mounting credit card debt, which topped $1.14 trillion earlier this year.
With economic pressures mounting, here are some expert-backed tips to stretch holiday budgets and avoid overspending.
Take Advantage of Holiday Sales
This year, the holiday shopping season is shorter due to later Black Friday and Cyber Monday dates, prompting many retailers to offer deeper discounts to avoid excess inventory. According to Adam Davis, managing director at Wells Fargo Retail Finance, “it’s a shorter holiday season and that will force the retailer’s hand to be pretty promotional in November.” Shoppers seeking the best deals can find steep discounts on high-demand items like clothing and electronics, with Morning Consult reporting that nearly half of consumers are holding out for apparel deals and 45% are eyeing discounts on electronics.
To stay on top of these offers, consumers can use online tools to track price drops and compare products, advised Sara Rathner, a credit card expert at NerdWallet. Many online platforms provide alerts for deals on specific products, helping shoppers snag the best prices as sales progress.
Embrace “Trading Down” for Savings
For shoppers looking to cut costs without sacrificing their holiday spirit, “trading down” to budget-friendly alternatives can be a practical solution. This trend, noted by Morning Consult economist Sofia Baig, sees consumers opting for lower-cost products over high-end brands. “Maybe they’re not shopping for luxury items at Sephora, they’re going to Target instead,” Baig noted.
Gen Z and millennials, in particular, are known for finding “dupes”—affordable alternatives to name-brand products—to save money. Secondhand shopping is another strategy Davis recommends for big-ticket items, providing quality gifts at a fraction of the original cost.
Adopt “Slow Shopping” to Curb Impulse Buys
The concept of “slow shopping” encourages consumers to approach holiday spending thoughtfully, reducing impulse purchases and helping keep budgets in check. Consumer savings expert Andrea Woroch explains that slow shopping involves taking time to consider each purchase. “This allows you to be mindful about what you’re buying, why you’re buying, and who you’re buying for while also giving you time to save up, compare prices and look for coupons,” Woroch said.
Slow shopping also encourages strategic timing, allowing buyers to hold off until prices are at their lowest. Woroch also suggests minimizing spending triggers, such as unsubscribing from promotional emails, disabling push notifications, and removing stored payment methods, which can help prevent impulse buys that lead to debt.
Book Holiday Travel on “Travel Tuesday”
Travel expenses can quickly add to the holiday budget, but for those still planning trips, “Travel Tuesday”—the Tuesday following Black Friday—offers a potential last chance to find deals on flights, hotels, and other accommodations. In 2023, Travel Tuesday saw a significant uptick in travel bookings, noted by Hopper’s lead economist, Hayley Berg, and McKinsey & Company found spikes in hotel and airline bookings on this date.
For families looking to save, swapping traditional presents for a shared holiday experience can be a memorable and budget-friendly choice. “Spending time together is better than any gift you could give,” Woroch said, suggesting that the joy of a holiday experience can outlast the excitement of material gifts.
With economic anxiety on the rise, making mindful choices this holiday season can help keep spending under control without sacrificing the festive spirit. By taking advantage of holiday sales, considering lower-cost alternatives, practicing slow shopping, and timing travel bookings, families can celebrate a financially balanced holiday season while making lasting memories.
