State of Holiday Spending 2026: 77% of Americans Say Inflation Will Be the Grinch That Stole Christmas
Key Takeaways:
- 77% of Americans say they’ll alter their 2026 holiday gift-buying strategy in response to rising prices and inflation.
- 51% report that ongoing cost-of-living inflation is driving severe financial anxiety as they head into the end of the year.
- 35% feel less financially stable in 2026 than they did a year ago.
- 43% admit to raiding their emergency funds in the past to cover holiday expenses.
Santa needs to tighten his belt, but nobody wants to break it to the kids. That’s the sentiment among the majority of Americans gearing up for the holiday season, according to The Penny Hoarder’s 2026 State of Holiday Spending Report.
With a variety of factors — notably creeping inflation — driving up the costs of everything from essential goods to luxury items, U.S. consumers are feeling the financial strain. More than three-quarters of survey respondents say they’re altering their 2026 holiday gift buying in response to rising prices and inflation, but more than half are also feeling social or family pressure to spend beyond what their budget allows.
Among the survey’s other findings:
- 35% of respondents say their financial stability is worse in 2026 than it was a year ago.
- A third (34%) expect to spend more this year, with 42% of that group saying inflation is the top reason, meaning they are spending more just to keep up with last year’s standard.
- For the 30% who plan to spend less, 42% point to inflation forcing cuts to their holiday budget.
- To offset elevated prices, 46% are limiting the number of gifts they buy, and 40% will opt for cheaper items.
- However, 46% of Americans say gifts for children are non-negotiable regardless of cost.
- Rising prices for necessities like groceries (56%) and gas (46%) have already forced heavy cuts to discretionary budgets over the last six months.
The Penny Hoarder’s Pollfish survey asked 1,000 U.S. adults about their plans for holiday spending and their overall financial situation in 2026. We’ll reveal what’s causing the most money stress and offer advice for how you can keep holiday spending in check — without turning into a Grinch. Here’s the state of holiday spending in 2026.
How Americans Feel About Their Finances Heading into the Holidays
What’s supposed to be the jolliest time of year is taking a hit thanks to rising costs that are squeezing Americans’ budgets. Although most respondents say their financial stability feels about the same this year as last year (37%), more Americans say their household finances are worse than a year ago (35%) rather than better (29%).
Inflation is, by far, the reason most consumers aren’t feeling so hot about their finances. More than half say it causes them the most anxiety when they think about budgeting through the end of the year. Other factors that contribute to the apprehension:
- Job security or labor market conditions: 15%
- Personal or family debt: 13%
- Geopolitical uncertainty or global events: 11%
- High interest rates: 10%
Unfortunately, these feelings aren’t likely to go away once the new year rolls around. The Penny Hoarder’s Financial Anxiety Barometer report found that Americans spend the equivalent of 96 days a year worried about money.
It can feel like an unrelenting battle, but there are a few ways to beat stubborn inflation.
How Much Americans Plan to Spend on the Holidays in 2026
So how much are Americans planning to spend during the 2026 holiday season? According to our survey, the average anticipated holiday spend is $818, but about 26% expect to spend $1,000 or more. Meanwhile, 3% say they don’t plan to celebrate or spend money at all for the holidays.
Gifts are the top expected expense by far, followed by food, celebrations, travel, decorations and donations.
Compared to 2025, though, 34% of our survey respondents expect to spend more this year.
Inflation’s Impact on the 2026 Holiday Budget
Regardless of how people are changing their holiday budget this year, it seems that inflation is the reason why.
Among those who expect to spend more on the holidays compared to last year, 42% say they expect to pay more just to match last year’s holiday. They’re doing it to keep pace with rising costs, not because they feel more financially confident.
In the other corner are those who say they’ll spend less on the holidays this year compared to 2025 (30%). Among them, 42% say inflation is forcing them to cut their holiday budget.
Consumer prices were up 3.4% year over year in July 2026, according to data from the US Bureau of Labor Statistics. Inflation has driven prices up on just about everything this year, fueled in part by tariffs amid a trade war and gas prices amid a war in the Middle East.
Strategic Shifting and Non-Negotiable Priorities
Inflation is certainly changing what and how shoppers buy, but gifts for children are nonnegotiable, our study shows.
In response to elevated prices or inflation, 77% will change their gift-buying strategy this year. Forty-six percent will buy fewer items, 40% will buy cheaper or smaller items, and 26% will trim the recipient list.
But some gifts are nonnegotiable, among the purchases that people say they’ll make regardless of whether it breaks their budget:
- Gifts for children (46%)
- Gifts for other family members (37%)
- Gifts for spouse or partner (35%)
- Gifts for friends (19%)
- Gifts for pets (15%)
Just 13% refuse to spend more than planned on any of their holiday budget categories.
How Americans Have Cut Back This Year
Consumers have spent the year trying to make their money stretch further amid inflation. Dining out less is a first line of defense for tight budgets – more than a third of Americans cut that first when scaling back discretionary spending. For everyday expenses, the price of groceries forced the biggest cutbacks in spending over the past six months, followed by gas prices (46%) and utilities (31%).
Trading name-brand items for generic items at the store was the top choice for coping with higher prices at 57%. That was followed by:
- Delaying major purchases (48%)
- Shopping at discount grocers (46%)
- Canceling recurring subscriptions (33%)
- Using apps to track prices and discounts (22%)
- Using AI to find deals/best prices (13%)
The good news for the holidays is that gifts and celebrations is the category Americans are least likely to pull back on. Only 4% say that’s where they made the steepest cuts this year.
How Holiday Travel Is Changing in 2026
Families coming together for the holidays leads to the annual end-of-year travel rush. Americans pack up their gifts and hit the highways and the skies to get to their destinations, both of which are much more costly to do these days. Although around 37% of consumers say they aren’t shaking up their travel plans, 1 in 5 Americans will skip travel this year altogether. Others are saving by:
- Cutting back on destination activities (27%)
- Staying with friends and family instead of in hotels (24%)
- Traveling shorter distances (18%)
Fliers may want to consider flying with budget airlines to cut down on travel spending — just watch out for sneaky fees. Road trippers can save on gas with some of our tips.
Financing the Season and Dealing With Leftover Debt
It’s tougher to get in the spirit of the holiday season if you’re still paying off debt from the previous one. That’s the case for 17% of survey respondents, who say they’re still carrying debt from the 2025 holiday season.
Plenty more are headed into the holidays weighed down by this year’s debt. More than half of respondents (53%) say they currently carry a credit card balance, with 22% describing it as “significant.”
Having high-interest credit card debt hanging over your head can put an obvious strain on a budget. But there are other sneaky ways Americans are already behind. A third of respondents say they’re currently enrolled in at least one Buy Now, Pay Later plan, and 18% in two or more.
And despite the advice of financial experts, 13% say they dip into their emergency funds every year to pay for holiday purchases.
Experts instead recommend planning ahead for holiday purchases by creating a sinking fund, which 12% of respondents say they plan to use this year. Here’s what the rest are using as their primary method for financing holiday gifts:
- Current income/cash flow (48%)
- Credit cards paid off each month (14%)
- Side hustles/second jobs (7%)
- Credit cards paid over time (6%)
- BNPL (4%)
- Emergency fund (2%)
- Borrowing from family and friends (2%)
Deal Timing and Shopping Windows
Black Friday has historically been the kickoff to the holiday shopping season, although many start their shopping before that. Retail giants like Amazon offer more opportunities to snag deals before the holiday season, like Prime Big Deal Days that typically run in October.
According to our survey, 38% of respondents say they’ll do the bulk of their holiday shopping before Black Friday.
But Black Friday still reigns supreme when it comes to deal events for the holiday season — 62% say they plan their shopping around Black Friday, while 42% say Cyber Monday is their most-planned-for shopping event.
Social Pressure: Over Half Feel Pushed to Overspend
The holidays come at the end of a stressful year for many Americans. According to our Financial Anxiety Barometer survey, just 14% of people feel in control of their finances and 65% say the cost of essential living expenses is their biggest source of financial anxiety.
Now, more than half of Americans feel pushed to spend beyond what their budget safely allows, our holiday spending survey shows.
Fifty-three percent say they feel at least some social or family pressure to overspend on gifts. Of those, 11% say they feel significant pressure. Meanwhile, 47% say they feel no pressure at all.
Ways to Save on Your Own Holiday Spending
The primary catalyst to high holiday spending is mostly out of our control. However, there are steps we can take to minimize the damage and avoid dipping into emergency funds, which 43% of respondents occasionally do to fund their holiday spending. Consider these tips:
- Make a holiday budget: Download one of our picks for the best budgeting apps and find where you can fit gifts and travel spending in with your usual expenses. We have a guide on how to make a budget specific to end-of-year spending.
- Create a sinking fund: This is simply a savings fund that’s dedicated to a specific expense. In this instance, it’s things like gifts, plane tickets and expensive holiday meals. Check out our explainer on how they work, then consider one of our favorite high-yield savings accounts to put the money in so you earn interest.
- Pick up a side gig: Bringing in extra money is one of the best ways to offset increased spending. We have a list of more than 40 side gigs that can help you boost your income.
- Use a 0% APR card: These cards have a promotional period where you’re not charged interest, giving you time to pay off holiday-related balances without worrying about those extra charges. Here are our top picks.
- Or consider a cash-back credit card: If you pay off your credit card every month, including during the holidays, using a cash-back credit card can help you save by earning a percentage back on your purchases.
Looking Ahead to 2027
Even amid rising prices and the pressures of the holiday season, there’s cause for cautious optimism, with 37% of respondents expecting their finances to improve in 2027.
However, most of us (63%) expect our finances to stay the same or get worse, which could spell trouble if you’re already in debt or struggling. There’s no time to procrastinate — start prepping now for the holiday season to avoid a spending hangover in 2027.
The Penny Hoarder Senior Managing Editor Tiffany Wendeln Connors, Managing Editor Katie Sartoris and Senior Editor of Freelance Mackenzie Raetz are Certified Educators in Personal Finance.
Methodology
The Penny Hoarder surveyed 1,000 U.S. adults on August 8, 2026 using Pollfish, and asked them questions related to finances and holiday spending. Results were post-stratified to better align with the U.S. adult population based on age, gender, region, and income. Post-stratified results, n=1,000 U.S. adults (Pollfish, Q3 2026). Each table shows stratified percentages; multi-select questions total more than 100%.
