Nov 9, 2025
The holiday season is approaching fast, and Americans are getting ready to open up their wallets.
President Trump suggested consumers can expect an easy and extravagant holiday season on his social media site Truth Social, writing, “EARLY PRICES ARE DOWN, WHILE TARIFFS ARE MAKING OUR COUNTRY AN ECONOMIC POWER AGAIN. Also, virtually NO INFLATION, AS STOCK MARKETS CONTINUALLY HIT RECORD HIGHS" (1).
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However, consumers on the ground know the reality is different. They’re anticipating higher costs, not lower — and the data largely back that up.
Holiday shoppers faced with higher costs need to pay extra attention to their budgets, as going overboard for the festive season could easily end up putting you in a financial hole for several months, or even longer.
Americans are planning on spending more for the holidays — mostly due to rising prices
According to several recent studies, Americans are planning on spending more money this holiday season than last year.
One Consumer Pulse survey conducted by KPMG found that shoppers anticipated spending $847 on average in 2025, which would be a 4.6% increase from last holiday season (2).
The Mastercard Economics Institute also expects 3.6% year-over-year growth in seasonal retail sales (3), while Adobe Analytics is reporting that holiday sales will likely be up 5.3% compared to last year, hitting $253.4 billion in spending between Nov. 1 and Dec. 31 (4). While this would be a year-over-year increase, it's not as big of a bump in spending as the 8.7% increase that happened between 2023 and 2024 (5).
The extra spending probably isn't happening because consumers plan to splurge and get more gifts — instead, despite what the president has said, it’s because tariffs seem to be making things more expensive.
Eight out of 10 consumers responding to the KPMG survey said they expect costs to be higher due to the tariffs (2), and recent Department of Labor reports from August showed consumer prices were up 2.9% year-over-year (6). This is the most recent available report, as September has not been released due to the government shutdown. However, tariffs may continue contributing to price increases, according to the Federal Reserve Bank of St. Louis (7).
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KPMG also said higher consumer spending will be driven by higher costs, rather than an increase in available discretionary funds or families’ financial situations improving (2), while the Mastercard Economics Institute said in its report that “Inflation is expected to be a larger contributor to sales growth, as opposed to actual sales volume” (3).
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How you can budget for higher holiday prices
While many consumers are planning to spend more, it's important for everyone who is shopping for the holidays to set a budget they can afford and will stick to.
One LendingTree study last year showed that 36% of Americans went into debt for the holidays, and 60% of people who took on debt said it caused them stress. Meanwhile, 42% regretted spending so much (8).
You don't want to be left with regrets, so here are a few key steps to take to make sure that doesn't happen to you:
- Take a look at your current account balances and assess how much you can save before the holidays, so you'll know how much you can pay for without borrowing. Don't forget to account for other expenses in your budget beyond presents, such as holiday travel and food for family gatherings.
- Make a list of the people you need to shop for, and set individual budgets for each person. Try to keep the numbers down by proposing a Secret Santa exchange to limit gifts you need to buy, or suggesting everyone just eat a special meal together instead of buying gifts for all the adults.
- If you can’t afford to do everything you normally do for the season, identify what's most important so you can prioritize. For example, flying home to see your family may be non-negotiable, but perhaps a fancy Christmas dinner out is something you can afford to sacrifice.
- Make the most of your holiday budget by shopping on Black Friday, Cyber Monday and other discount days so you can get as many items on sale as possible.
- Bring your list with you everywhere (or save it on a device), so if you spot any bargains that might be good for someone on your list, you can snap them up.
- Consider homemade gifts or offering the gift of your time. For example, you could offer dog sitting for your friend's next vacation, or babysitting for frazzled parents who would enjoy a night out.
By taking these steps you can combat higher prices and minimize the impact that tariffs will have on your holiday cheer.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Truth Social (1); KPMG (2); Adobe (3); Mastercard (4); Adobe (5); Department of Labor (6); Federal Reserve Bank of St. Louis (7); LendingTree (8)
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
