Nearly Half of Holiday Gift-Givers Have Overspent, With 43% of Them Saying Debt Is Synonymous With the Season
Holiday cheer is priceless — until your credit card statement disagrees.
This year, 30% of holiday gift-givers expect to go into debt, according to the latest LendingTree survey of nearly 2,050 U.S. consumers. Not only that, but 46% of those who’ve gone into debt for presents in the past say it’s because of inflation and the rising cost of gifts.
Here’s what else we found.
Key findings
- The season of giving may go hand in hand with overspending. Among the 69% of Americans participating in gift-giving this year, 37% feel pressured to give and 26% say it causes stress. Meanwhile, nearly half (47%) have gone into debt due to holiday spending in the past — and 43% of that group believe debt has become synonymous with the holiday season.
- Consumers are willing to break their budgets to spread holiday cheer. While most (47%) Americans participating in gift-giving have budgeted $100 to $499, 30% still expect to go into debt this year. Among those who’ve ever gone into holiday debt, 39% admit to overspending to make their children happy, while 28% do so to impress the gift recipient. Unfortunately, 63% of Americans who’ve gone into debt for holiday gifts have regretted it.
- Inflation is making spirits dull. Among Americans who’ve gone into debt due to gift-giving, 46% attribute their overspending to inflation and the rising cost of presents. For the 31% of Americans opting out of gift-giving this year, 52% cite cost as a reason. Additionally, more than half (55%) of gift-givers will scale back on traditions (like gifts, Secret Santa and Elf on the Shelf) due to inflation.
- Those on the nice list are hoping for stockings filled with cash. This year, top gift preferences among gift-givers include cash (22%), gift cards (18%) and experiences (13%). Nearly half (49%) of those participating in gift-giving wish to receive cash this season, and 39% say they’d trade all their gifts for the equivalent cash value if possible. Among gift-givers, 27% say if they received cash they would use it to pay bills.
’Tis the season to be owing: 47% of gift-givers have gone into debt
Santa may have an IOU list, because gifts are coming at a cost this year. Nearly 7 in 10 (69%) Americans will participate in gift-giving this year, leading with baby boomers ages 60 to 78 (77%), those with children 18 or older (77%) and those earning $50,000 to $99,999 (75%).
Of those giving gifts, 37% feel pressured to do so, particularly Gen Zers ages 18 to 27 (59%). Family (15%) is the top source of pressure. Just 10% blame friends, while 13% blame both.
To make matters worse, just over a quarter (26%) say gift-giving causes them stress, led by Gen Zers (36%) and those with children younger than 18 (32%). Looking at previous holiday seasons, 47% have gone into debt due to holiday spending. That figure is even higher among those with children younger than 18 (62%), millennials ages 28 to 43 (55%) and Gen Zers (55%).
Still, 33% say gift-giving has become more significant to them over time, while 38% say its significance hasn’t changed.
Across all those who’ve gone into holiday debt, 43% say debt has become synonymous with the holiday season and 28% somewhat feel that way.
Matt Schulz — LendingTree chief credit analyst and author of “Ask Questions, Save Money, Make More: How to Take Control of Your Financial Life” — says that’s understandable.
To help make gift-giving less stressful, 41% of givers have set budgets — the most common response. That’s followed by:
- Giving gift cards (36%)
- Making wish lists (24%)
- Discussing gift expectations (21%)
- Going shopping with the person receiving the gift (18%)
- Playing Secret Santa or another secret gift exchange (14%)
- Playing White Elephant (12%)
Receiving a gift from someone you didn’t expect to get one from can be a major stressor — which is why 35% of givers have emergency gifts for unexpected gift-givers.
Gift-givers think the Christmas cheer is worth the cost
How much will Americans spend on gifts this year? Among those giving gifts, 47% plan to spend $100 to $499 on all their gifts. Meanwhile, 23% plan to spend $500 to $999.
Gift-givers expect to spend the most on their kids (42%), followed by significant others (19%), parents or guardians (9%), siblings (9%) and friends (8%).
Among those giving gifts, 22% have had gift debt before and expect to again this year. Another 7% expect they’ll go into debt for the first time. Among those who’ve been in holiday debt, 39% admit to overspending to make their children happy. Meanwhile, 28% do so to impress the gift recipient and 24% like to give expensive gifts.
Shelling out doesn’t mean gift-givers are happy with the results, as 63% of Americans who’ve gone into debt for holiday gifts have regretted it. That’s most true among Gen Xers ages 44 to 59 (71%). Their regret may come with good reason: Despite a significant percentage overspending to impress someone, 70% of those participating in gift-giving this year wouldn’t be comfortable knowing that someone else went into debt to buy them a gift.
Schulz believes communication is key. “If you’re struggling financially and need to dial back the gift-giving this holiday season, tell people,” he says. “It doesn’t mean you’re begging for sympathy or a pity party, nor does it mean you have to open your books to your loved ones. It means you’re open about what you’re facing. Most of your loved ones don’t want you to go into debt for a holiday party or gift, so they’ll understand. The ones who don’t understand might be folks you shouldn’t give a gift to anyway.”
Inflation contributes to overspending
Inflation is the Grinch this year, particularly among indebted gift-givers. In fact, 46% attribute their overspending to inflation and the rising cost of gifts. Meanwhile, 44% say they didn’t intend to spend so much, but it just added up.
Across all Americans, 31% are opting out of gift-giving altogether this year, with Gen Zers (39%), those earning less than $30,000 (37%) and those without children (36%) the most likely to do so. As for why, 52% cite cost as a reason, while 29% have a mutual agreement among gift-givers and 22% don’t celebrate holidays.
Meanwhile, 55% of gift-givers plan to forgo or cut back on traditions (like gifts, Secret Santa and Elf on the Shelf) due to inflation.
Cash is king this holiday season
Gift-giving doesn’t have to be stressful, particularly because the top gift preference among gift-givers is cash, at 22%. That’s followed by:
- Gift cards (18%)
- Experiences (13%)
- Clothes (10%)
- Technology (10%)
- Food or beverages (6%)
- Handmade gifts (5%)
- Accessories (4%)
- Jewelry (4%)
- A donation to charity in the recipient’s name(3%)
In fact, 49% of those participating in gift-giving wish to receive cash as a gift at some point this holiday season. That’s most true among those with children younger than 18 (61%), Gen Zers (58%) and millennials (57%).
Beyond that, 39% would trade all their gifts for the equivalent cash value if they could. When it comes to what they’d do with a cash gift, 27% of gift-givers would use it to pay bills, while another 27% would buy themselves something nice. Following that:
- 18% would save it
- 11% would buy someone else something nice
- 9% would pay down debt
- 4% would invest it
Balancing this season of giving with saving: Expert tips
Overspending on gifts can be easy, but there are a few ways to avoid financial overload this holiday season. Particularly, Schulz recommends:
- Take advantage of credit card rewards. “Got money saved for the holidays?” Schulz asks. “Rather than paying cash for everything, sign up for a new rewards card to get a sign-up bonus and extend your budget. That may feel scary, but if you stick to your budget and only buy what you were going to pay cash for anyway, you can get that sign-up bonus perk without any risk of taking on debt.”
- Shop around. “It’s some of the oldest advice, but it’s among the best,” Schulz says. “Prices and selection can vary widely from store to store, and if you don’t take the time to comparison shop, you’re likely paying too much. The amount you save can make the extra legwork worthwhile.”
- Don’t be afraid to get creative. “Great gifts don’t have to cost a fortune,” he says. “Something given from the heart can be as special and welcome as something from the jewelry store.”
Methodology
LendingTree commissioned QuestionPro to conduct an online survey of 2,049 U.S. consumers ages 18 to 78 from Oct. 14 to 15, 2024. The survey was administered using a nonprobability-based sample, and quotas were used to ensure the sample base represented the overall population. Researchers reviewed all responses for quality control.
We defined generations as the following ages in 2024:
- Generation Z: 18 to 27
- Millennial: 28 to 43
- Generation X: 44 to 59
- Baby boomer: 60 to 78