The 2025 holiday season arrives with a mix of excitement and caution. Approximately 1 in 3 shoppers who used credit cards for holiday shopping in 2024 still haven’t paid off those balances, and 10% are still paying off their previous year’s spending. Many Americans still want to celebrate, but financial stress shapes how they plan to do it.
Shoppers brace for higher prices this season for gifts, travel and entertaining, but simple tips can help keep costs in check. Photo credit: Depositphotos.
On the surface, spending looks strong: total holiday sales are projected to top $1 trillion for the first time. However, that big number hides important shifts. Many families are entering the season already carrying debt. More than half of shoppers, 56%, say holiday costs cause them stress.
Prices continue to rise, regardless. The National Retail Federation estimates shoppers will spend about $890.49 per person on holiday food, decorations, gifts and other seasonal items. That’s roughly $182 more on gifts alone than last year, driven largely by inflation and tariffs. In one survey, nearly three-quarters of holiday shoppers expect tariffs to impact their holiday shopping. Lower-income families feel this pressure the most.
As a result, many consumers are rethinking their habits. Overall holiday spending is expected to drop 5% compared to 2024, the first real decline since 2020, even though total spending remains historically high. Gen Z alone plans to cut holiday spending by nearly a quarter.
All of these points lead to one clear takeaway: people are looking for smarter, more affordable ways to enjoy the season. Practical strategies for saving aren’t just helpful this year, they’re essential for keeping holiday cheer alive without adding new debt.
Save on entertaining without losing the sparkle
Entertaining can be one of the biggest budget busters during the holidays, but you can still host gatherings that feel festive without draining your bank account. Start by hosting a potluck where guests bring a favorite dish. This lightens both your prep load and your grocery bill. Shop your pantry first and plan your menu around what you already have to avoid last-minute splurges.
When it comes to food, stick to simple, comforting meals like a classic meatloaf, roasted seasonal vegetables or a hearty soup with homemade bread; dishes that can feed a crowd without straining your wallet. You also don’t have to limit yourself to traditional holiday fare. Think carnitas, enchiladas or an easy pasta dish; flavorful, crowd-pleasing options that feel festive without the high price tag. Sometimes, a relaxed, homey meal shared with friends is far more memorable than an elaborate spread.
For drinks, skip pricey wines and go BYOB. Let guests bring their favorite beverages, or offer one signature cocktail made with just a few ingredients. Small changes like these can add up to big savings while still creating a warm atmosphere.
Gift smarter, not harder
Holiday gifts are often the single biggest expense of the season, but thoughtful doesn’t have to mean costly. Make gifts personal. Homemade bread, cookies or orange marmalade are heartfelt and affordable. For groups, try a Secret Santa or white elephant exchange to limit the number of gifts you need to buy. Setting a spending cap helps keep expectations reasonable and encourages creativity.
Break apart bulk sets to stretch store-bought items. Candles, lotions or bath bombs can be split among several people and wrapped individually. Shop early and track prices to avoid panic buying and take advantage of early discounts.
Don’t overlook thrift stores, which often have hidden gems that make perfect gifts without the retail markup. A quick browse can turn up unique finds, such as vintage mugs or puzzles that add personality to your gift list while saving money.
Give experiences instead of things for a meaningful but low-cost option. A family day ice skating, a hike followed by cocoa or a movie night at home can create lasting memories, and may even turn into a family tradition.
Pick a theme, such as a book or recipe exchange, to make group giving fun and inexpensive. And finally, don’t be afraid to say no. Workplace or neighborhood gift exchanges can add up quickly, and it’s okay to skip them if they don’t fit your budget this year.
Cut costs on travel
Holiday travel is expensive, but small changes can lead to real savings. Be strategic with timing. Midweek flights or travel on the holiday itself often cost less. If you can drive to your destination, compare the total cost of gas versus flying, especially when traveling with a family. This is also a great time to cash in any travel rewards you’ve been sitting on. Use reward points for flights, hotels or rental cars, and check out online sites designed to help you stretch your travel dollars.
“I sign up for alerts from price-tracking websites to get the best airfare deals. Point.me helps you maximize using points and miles while Going.com notifies you of price drops to and from your chosen cities,” says Ashley Wali from Wanderlux.
Lodging is another place to save. Staying with family or friends can significantly cut costs and often makes the trip more meaningful. Additionally, coordinate outfits; bring only what you need and avoid baggage fees. Pack airport snacks and meals ahead of time to skip overpriced food.
“I always pack food for the airport,” says Jim Markus from Gluten Free Palate. “Even if I splurge a little on high-end ingredients, it’s cheaper than buying anything at the airport.”
Don’t overlook the small wins
Exactly 84% of U.S. consumers plan to cut discretionary spending over the next six months, underscoring that mindful spending is a growing priority this season. And even small changes can make a big difference.
Set a realistic budget and track your spending using a simple spreadsheet or application. Cut back on extras that don’t add much joy, like fancy wrapping paper, novelty stocking stuffers or duplicate baking ingredients.
Make the most of what you already own. Reuse last year’s gift bags, ribbons and decorations instead of buying new. Get creative with wrapping paper. Upcycle old maps, sheet music and calendars for inexpensive, unique packaging. Use fabric, such as tea towels, cloth napkins or scarves from thrift stores, which look luxe and can double as part of the gift.
Finally, remember that the best memories often come from experiences, not things. A night watching holiday movies, baking cookies together or walking through your neighborhood to see the lights can be just as meaningful as any store-bought gift.
The bottom line
Saving money during the holidays doesn’t mean sacrificing joy. With a little planning and creativity, you can host, gift and travel in ways that keep both your heart and your wallet full. This year, making memories doesn’t have to mean making debt.
Sarah Jenkins is the blogger behind Front Range Fed, a food blog dedicated to helping busy families cook and connect through easy, flavorful recipes. Drawing inspiration from life in the Colorado foothills, Sarah shares dishes that make weeknight cooking feel simple and satisfying. She lives in Boulder with her husband, two sons and their much-loved pup, Maya, who’s always hoping for a taste of what’s cooking.
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