Skip to Content
Tally logo

How Much Do Americans Spend on Christmas Each Year?

The holiday season is the time for joy and giving, but it's recently become a time for spending too.

Justin Cupler

Contributing Writer at Tally

August 27, 2021

The holiday season can be intoxicating as you take in sights, sounds and tastes. But with the holiday season comes an additional expense: holiday shopping.

Whether it's holiday gifts, decorations, food or cards, many Americans stretch their budgets thinner than usual to make the most of this time of year. Unfortunately, this has recently exploded into a pattern of increased spending and taking on additional debt, which can turn the most wonderful time of the year into a multi-year-long credit card bill.  

How much do Americans spend on Christmas each year? We explore that and the debt that may come along with it below. 

Spending trend on Christmas gifts

Gifts are, of course, the bulk of the holiday shopping numbers. Over the past five years — 2016 through 2020 — the average yearly expenditure on gifts was $629, according to the National Retail Federation (NRF). However, that only tells part of the story. 

There is consistent growth in the amount people spend on Christmas gifts from 2016 through 2019. This yearly growth trend was as follows:

  • 2016: $589

  • 2017: $608

  • 2018: $638

  • 2019: $659

In 2020, the coronavirus pandemic struck, hitting many spenders in the pocketbook. This drove the average holiday gift spending on loved ones and co-workers down to $650 — a 1.3% decrease. While that wasn't a significant drop, it shows a clear diversion from the previous four years. 

The U.S. experienced a similar dip in gift spending during the financial collapse of 2007 and 2008. Holiday gift spending fell from $572.81 in 2007 to $526.13 in 2008 before bottoming out at $507.23 in 2009. Spending remained under 2007 levels until 2014 when it rose sharply from $558.18 to $595.06.

Gifts aren't the only things we buy during the holiday season. We also put a significant amount of money into food, candy, decorations and cards. The NRF's research shows the average American spent $219 per year between 2016 and 2020 on these non-gift items. 

Between 2016 and 2020, the NRF reports consistent rises in expenses, except in 2018: 

  • 2016: $207 

  • 2017: $218

  • 2018: $215

  • 2019: $227

  • 2020: $230

Like gift buying, these items saw a significant dip amid the 2008 financial crisis, but the COVID-19 pandemic didn't have the same impact. 

Spending on other non-gift items

Americans' average Christmas spending on other non-gift items outside of food, candy, decorations and cards was $143 between 2016 and 2020, according to the NRF. 

Like gifts, this expense remained on a steady upward trend from 2016 through 2019. The yearly numbers were as follows: 

  • 2016: $140

  • 2017: $141

  • 2018: $155

  • 2019: $162

However, when the pandemic struck in 2020, consumer spending on these items plummeted to $117 — a 27.7% plunge. This dip is a clear sign of the importance of gifts, cards, food and decorations relative to other non-gift items. 

Growing debt for Christmas shopping

Gift giving, unfortunately, often leads to growing debt, as shoppers reach for their credit cards instead of cash or a debit card. In 2020, a MagnifyMoney survey found the average shopper took on $1,381 in holiday-related credit card debt. 

Just five years earlier, they took on just $986 in holiday debt. That's a 40% increase, despite spending only $45.22 more on average in 2020 — $952.57 in 2015 versus $997.79 in 2020. 

The cause could be the pandemic pushing shoppers to use their credit cards and keep their cash reserves in the bank, just in case. While it's understandable to make this decision, that extra $395 on a credit card can add up over the years. 

Let's put some numbers behind those stats. Suppose you used a 20% APR credit card with a 4% minimum payment and made only the minimum payment. It'd take you 73 months to pay off the $986, and you'd pay $600 in interest. The $1,381 would take you 87 months to pay off, and you'd pay $832.68 in interest. 

The one positive in the survey is only 31% of Americans incurred debt to cover holiday gifts. That was a 13-percentage-point decrease relative to 2019. However, the average amount of debt shoppers incur for the winter holidays has risen every year since 2015: 

  • 2015: $986

  • 2016: $1,003

  • 2017: $1,054

  • 2018: $1,230

  • 2019: $1,325

  • 2020: $1,381

Keeping your holiday spending in check 

While an upward tick in retail sales among Americans is expected amid the holiday season, here are some tips to help you spend responsibly

Setting a holiday budget

Just like your monthly budget, you need a special budget just for the holidays. This could eliminate the stress of overspending or reaching for a credit card. 

Since the holidays occur at the end of the year, you can use the entire year to build savings for the holidays. Look at your monthly budget and determine where you may have extra money or what discretionary expenses you can trim back to free up holiday spending cash. 

After determining the amount, you can set aside each month, multiply that by 12 months to get your Christmas budget. For example, if you can set aside $50 per month for the holidays, you should be budgeting $600 on holiday purchases.

To help further pad your holiday spending budget, you can put this money into a high-yield savings account each month and earn a small amount of interest on it throughout the year. 

Using your credit card wisely

If you use your credit card responsibly, you could earn reward points on your Christmas spending and pay no interest.

Use a credit card that offers the highest reward points or cash back at the retailer you plan to shop at. Once the bill comes in the mail the following month, you can use your holiday savings to pay it in full by the due date. 

This ensures you earn the points but pay off the balance within the interest grace period, so the credit card company doesn’t apply interest to your account.  

Making Christmas shopping a year-round event

While holiday sales like Cyber Monday and Black Friday get all the hype, there are many other opportunities to save as much money or more throughout the year.

Instead of focusing only on holiday-centric sales, check the sales and ads year-round and make your gift purchases anytime a great sale pops up. You can get amazing deals during season-ending events, such as the end of the spring, summer, fall or winter. 

You can also keep an eye on clearance sales shortly after the holidays as retailers replace last year's popular toys. This is a great way to save big on great gifts for the kids. 

Store these gifts until the holidays and watch as your dollar goes further this holiday season. Plus, you can avoid the holiday rush. 

Setting gift-giving limits

It's common to exchange gifts at holiday get-togethers with friends and family, but the fear of spending less on a gift than what they spent on you can fuel the desire to overspend. 

You can avoid this by establishing a reasonable spending limit upfront. For example, you may decide the gifts you and your family member or friend buy each other can’t exceed $25. This ensures you stay on budget and don't feel embarrassed if your loved one buys you something extravagant.  

You can also propose a Secret Santa event with a strict cap on the gift price. This will keep you on budget and ensure no one knows who bought each gift. 

Buying gifts for loved ones during the holiday season can be very rewarding, but overextending yourself to do so can cause a lot of stress and anxiety. Except for 2020, the U.S. has seen a continuous uptick in holiday spending over the past five years. Plus, holiday debt has risen since 2015.

By breaking free of the upward trend in holiday spending and growing debt, you can enjoy the holidays without potentially harming your long-term financial goals. So make it your holiday gift to yourself not to overspend or rack up debt. 

If you find yourself among the holiday shoppers who got deep into debt and are struggling to pay it off, the Tally debt repayment app can help. It develops a debt-repayment plan based on your needs and also includes a lower-interest line of credit​​1 you can use to pay off high-interest credit cards. Also, you make just one payment to Tally, and the app will disburse payments to the credit card issuers. 

​​1To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate.