How Much Does the Average Family Spend on Christmas?

The holiday season marks a significant period of consumer activity, characterized by widespread expenditures on gifts, festive meals, and seasonal celebrations. Families across the United States engage in various forms of spending to observe this annual tradition. These expenditures reflect a blend of cultural customs and personal financial decisions, shaping the economic landscape during the final months of the year. Understanding the dynamics of this spending provides insight into household financial behaviors and broader economic trends.

Overall Average Christmas Spending

Individual spending for the 2024 winter holidays was anticipated to reach a record average of $902 per person, according to the National Retail Federation (NRF). This average covers various categories, including gifts, food, and decorations. This forecast represented an increase of approximately $25 per person compared to the previous year and surpassed the 2019 record by $16. Total holiday retail sales for November and December 2024 were projected to fall between $979.5 billion and $989 billion, signifying a growth of 2.5% to 3.5% over the $955.6 billion spent in 2023.

This anticipated rise in spending reflected a healthy economic environment, supported by a strong job market and consistent wage growth. Although consumers remained price-conscious, underlying economic conditions provided a foundation for continued holiday expenditures. Actual sales for the 2024 holiday season ultimately exceeded forecasts, reaching $994.1 billion, indicating robust consumer engagement.

Breakdown of Christmas Spending Categories

The average Christmas budget is allocated across several distinct categories, with gifts typically consuming the largest portion. Of the average $902 individuals expected to spend, approximately $641 was designated for gifts intended for family, friends, and co-workers. Within the gift category, family members received the largest share, averaging $488, while friends accounted for $83, co-workers for $33, and other gifts for $38.

Beyond gift-giving, a significant portion of holiday spending is directed toward other seasonal necessities. An average of $261 per person was allocated for items such as food, beverages, decorations, and greeting cards. This category includes expenses for festive meals and gatherings, which often see increased demand for premium groceries and specialty items. Decorations, including trees, lights, and ornaments, also contribute to this segment of holiday expenditures.

While not always captured in per-person retail spending averages, travel is another component of holiday expenses for many families. Costs associated with visiting family or taking vacations during the holiday period can add to the overall financial outlay. Spending on holiday entertainment and experiences, such as attending events or shows, also forms a part of the seasonal budget for some households.

Factors Influencing Christmas Spending

Christmas spending varies considerably among families due to a range of influencing factors. Household income plays a substantial role, as families with higher disposable incomes tend to spend more on gifts and celebrations, including luxury items. Conversely, middle-income households often balance their holiday spending with savings goals, while lower-income families frequently prioritize meaningful gifts over expensive ones, sometimes opting for handmade items or second-hand purchases. For instance, in 2024, high-income consumers with earnings over $150,000 budgeted around $1,559 for the holidays, compared to middle-income earners ($50,000-$150,000) who planned to spend $1,268, and lower-income individuals (under $50,000) who expected to spend $915.

Broader economic conditions also significantly shape consumer spending habits during the holidays. Factors such as inflation, consumer confidence, employment rates, and wage growth directly affect how much families feel comfortable spending. Lower inflation rates in 2024, compared to the previous year, contributed to increased spending power, while a strong job market and rising wages supported consumer confidence and their capacity to spend.

Family size and composition influence spending, as households with more children or extended family members typically incur higher costs for gifts and holiday gatherings. The life stage of the household head also impacts spending patterns, with younger adults, such as Gen Z and Millennials, and parents of young children more likely to increase their holiday expenditures. Geographic location can also introduce variations in the cost of living and local traditions.

How Families Fund Christmas Spending

Families employ various methods to finance their Christmas expenses, balancing current income with credit and savings. Many consumers proactively save money in advance for holiday purchases, with approximately 62% reporting this as a strategy to manage costs. Direct payments from current income or checking accounts are also common, with 46% of consumers opting to use debit cards and 41% using cash for their holiday purchases.

Credit cards play a substantial role in holiday spending for a notable segment of the population. About 34% of consumers primarily rely on credit cards for their holiday purchases, and 53% plan to use them for at least some expenses. While some individuals use credit cards to earn rewards, intending to pay off the balance in full (31%), a portion anticipates carrying a balance, with 16% not planning to pay off their credit card debt immediately. This can lead to an average credit card debt of over $1,170 for holiday spending for those who carry a balance.

Year-end bonuses or other forms of supplemental income can also contribute to holiday funding. Approximately 36% of individuals who receive a Christmas bonus utilize it for holiday gifts or to replenish funds already spent on gifts. These bonuses provide an additional financial cushion for seasonal expenditures. Less common, but still utilized, are retail layaway or “Buy Now, Pay Later” (BNPL) financing plans, with a portion of consumers (4-11%) opting for these deferred payment methods.