More Than 30% Of Americans Will Go Into Debt for the 2023 Holidays
As inflation and interest rates rise, American adults will rack up around $1500 in debt this holiday season.
According to a 2022 LendingTree survey, 30-35% of adults in the United States go into thousands of dollars in debt during the holidays. And this year, experts project that holiday spending on gifts, decorations, food, and travel will break new records.
The National Retail Federation expects U.S. consumers will spend between $957.3 billion and $966.6 billion throughout the 2023 holidays, a 3-4% increase since 2022. Similarly, a NerdWallet 2023 Holiday Travel Report predicts American holiday travelers will spend $254 billion on flights or hotels between November 2023 and January 2024.
Financial and money-management experts offer practical solutions for keeping seasonal expenses at a minimum and staying ahead of holiday debt.
Save Money for the Holidays & Avoid Debt
There are many low-effort ways for American consumers to save on holiday spending. Make a List of Gift Recipients in Advance
Get a head start on saving for the holidays by making a list of gift recipients in advance. CNBC suggests consumers write down everyone they plan to shop for to get a clear overview of how many gifts they’ll need. Buying random gifts without a plan can lead to unconscious overspending, so putting together a clear, concise list before shopping can help save money.
Set a Budget (And Stick To It) Financial professionals recommend setting and adhering to a strict budget for holiday expenses, whether shopping for gifts or booking travel. “Set a budget and pay for your gifts with cash,” says Christopher Alarcon of Financially Well
Off. “This way, you won’t accrue debt and force yourself not to buy gifts falling outside your budget.”
Establishing a budget for holiday spending in advance also allows consumers to save money before the season begins. Setting up a holiday fund for gifts, entertainment, and travel is a helpful way to prevent excessive spending and debt accrual.
Seek Affordable Alternatives To Trendy Items
Instead of purchasing expensive, trending holiday items, look for budget-friendly alternatives. According to Rolling Stone, one of the top gift items for the 2023 holiday season is Stanley’s Quencher H2.0 Flowstate Tumbler. This tumbler went viral on social media for its functional travel features, like an ergonomic handle and cupholder-compatible design.
Genuine Stanley tumblers cost over $40, but there are options for Stanley alternatives with a similar aesthetic and functionality for a fraction of the price. Many retailers offer practical but more affordable lookalikes for the season’s hottest name-brand gifts.
Contribute to a Group Gift One practical way to save money on large gifts is by purchasing them with a group. Splitting the cost of an expensive tech accessory or furniture piece among several people lessens the financial burden on one person. This is an excellent option for those wanting a specific but costly item, as it allows more people to contribute to the gift-giving. “My sister has been dying for an outdoor egg chair to complete her patio, but she hasn’t bought one yet since they’re so expensive,” says Elise Armitage of What the Fab. “I plan to split the cost of an egg chair with friends and family to finally get her one this Christmas.”