Shoppers plan to spend $880 on gifts this holiday season

American consumers are tightening their belts for the upcoming holiday season.

NerdWallet reports that the average person intends to spend approximately $880 on gifts. This figure represents a 21% drop from last year, when the planned average exceeded $1,100. The decline reflects a widespread effort to reduce discretionary spending.

Kim Palmer, a personal finance expert at NerdWallet, attributes the shift to rising prices across multiple consumer categories. She notes that financial stress is pushing families to trim budgets. Many are cutting travel expenses and opting to stay closer to home rather than just buying fewer gifts.

Palmer advises shoppers to create lists early and spread purchases over several months. This strategy helps avoid the rush of December buying. She also recommends waiting for sales, as prices often dip near the holidays. Shoppers should track specific items rather than making spontaneous decisions.

Payment methods have also changed, with more people using buy now, pay later services. Palmer warns that this approach carries risk because it creates debt that must be repaid. She urges consumers to avoid tapping emergency savings for holiday purchases. Sticking to a predetermined list helps prevent impulse buying.

The data suggests a cautious approach to spending is now the norm for many households. Families are prioritizing essentials while still celebrating the season with reduced expenditures.