38% of Americans want to cry when thinking about the cost of holidays this year   

  • More than one-third of Americans are unable to afford gifts this holiday season (36%)
  • To cope, 69% of Americans plan to take on debt to cover costs this holiday season
  • Of those who plan to take on debt, 38% are most likely to do so to cover groceries for holiday meals 

The holiday season is upon us and, what’s usually a festive time of year, has been overshadowed by record inflation, a looming recession and an overall decline in purchasing power among consumers. The result: many Americans are unable to afford gifts this holiday season, with others planning to spend less, buy fewer gifts, or take on debt to pay for the holidays this year. 

According to a study conducted by Qualtrics on behalf of Credit Karma, 39% of Americans say they are unable to afford gifts this holiday season. This is especially true among respondents with household incomes (HHI) below $50,000, more than half of which said they’re unable to afford gifts (51%). The main factors contributing to Americans’ inability to afford gifts include external factors like, the rising cost of living (64%) and inflation (53%), as well as other key factors, such as living paycheck to paycheck (53%) and not having money saved for the holidays (51%). 

To afford gifts this year, nearly one-third of Americans say they’re willing to sacrifice their savings (32%), while others plan to sacrifice traveling (24%), holiday decor (20%) and hosting holiday events (19%). Worth noting, 16% of respondents say they’re planning to sacrifice groceries to afford gifts this holiday season. 

Despite affordability issues, some Americans plan to spend more this year. 

Due to broader economic conditions, many Americans intend to spend less this holiday season compared to last. According to the study, nearly half of Americans plan to decrease spending this year compared to last (48%) while another one-in-five plan to spend more (21%). Among those who plan to spend more, 44% say their spend will increase because of the rising cost of goods while 37% say they’ll spend more out of a felt obligation to treat those who they love. For others, specifically those who expect to hit the road for the holidays, 31% say they’ll spend more because of rising gas prices.

In addition to a desire to treat those who they love, many respondents actually reported feeling pressure from friends and family to spend money they don’t have on gifts this year. According to the study, 28% of respondents reported feeling this way, including 42% of Zoomers and 41% of millennials. This could lead to unwanted debt for those unable to resist the pressure. 

It’s beginning to look a lot like debt-mas

With many households reporting they’re unable to afford the holidays this year, nearly 70% plan to take on debt. Of those, more than one-third plan to take on $500 or less (36%) and 27% plan to take on anywhere between $501 and $2,500 in debt. While most of those who plan to take on debt expect to do so to pay for gifts for family (59%) and kids (50%), a whopping 38% plan to take on debt just to cover the cost of groceries for holiday meals. 

This mirrors the top anticipated spending categories for consumers this holiday season. According to the study, Americans expect to spend the most on gifts for others (69%) and groceries for holiday meals (43%), followed by travel to visit family (20%) and personal gifts for themselves (14%). When it comes to the specific gifts consumers plan to give this year, here are the top gifts they plan to give:

Gift cards53%
Clothes and accessories 52%
Self care or beauty (serums, lotions, candles, etc.25%
Food or drink (cookbooks, kitchenware, etc.)24%
Electronics (computer, Ipad, cell phone, etc.)24%
Gaming devices and accessorie22%
Crafts and homemade gifts18%
Home and decor17%

Every gift matters this year as more than one third of Americans rely on cash and gifts during the holiday season to make ends meet (34%). This is especially common among Gen Z and millennials, 46% of which say they’re reliant on cash and gifts to make ends meet. 

What’s inflation got to do with it?

To combat current market conditions, many Americans are getting crafty with how they shop. According to the study, nearly 40% of Americans are on a holiday shopping freeze until annual holiday sales, like Black Friday and Cyber Monday, begin. That’s part of a larger trend of Americans who, because of inflation, say they will rely on holiday sales and discounts for their shopping this year (70%). Others who are mindful of how inflation will impact their holiday spending say they will buy fewer gifts (63%). Others are opting to shop earlier. More than one-in-four Americans began shopping for the 2022 holiday season before October (25%), with 13% starting their shopping before or during the month of July. 

Don’t let the holidays get you down

With millions of Americans financially unprepared for the holiday season, many are starting to experience the emotional toll. According to the study, 38% of Americans want to cry when they think about how much the holidays will cost them this year. This was especially true among younger generations. More than half of Zoomers say they want to cry when thinking about their holiday spend (51%), along with 43% of millennials. 

“For most, the holidays are a wonderful time of the year, a time when we get to come together with family and friends and celebrate the various occasions that matter most to us. However, behind the festivities and fun are the expenses that come with it and, at the end of the day, somebody has to foot the bill,” said Colleen McCreary. “While costly holidays are something we have all come to expect, things are looking a little different this year with record inflation and an continuously uncertain market. As a result, we’re seeing some Americans hesitant to splash out for the holidays and others planning to take on hefty sums of debt. For those looking to take on debt, it’s important to make sure you’re only spending what you can reasonably afford to pay back. With the high interest environment that we’re currently in, you risk racking up debt and paying a premium. If you’re feeling the financial pinch this holiday season, consider communicating that to your friends and family, setting the expectation of what you can afford to spend. This should also help to alleviate some financial stress.” 


This survey was conducted online within the United States by Qualtrics on behalf of Credit Karma from September 23-27, 2022 among 1,037 adults ages 18 and older.