Inflation is forcing more Americans to scale back holiday spending

Two-thirds of Americans expect to cut at least one holiday expense, with gifts and travel among the biggest areas to be reduced.

More Americans are trimming holiday budgets as inflation continues to reshape household spending choices ahead of the season, according to a new national survey from Thrivent, the Fortune 500 financial services company.

The Thrivent Holiday Spending Survey, conducted by Ipsos between late September and early October and based on a probability sample of 2,158 U.S. adults, found that 68 percent of respondents plan to reduce at least one holiday expense.

That share is roughly unchanged from the prior year, but the survey points to notable changes in how people are cutting back — and why those shifts matter for advisors.

The findings also offer an opening for values-based planning conversations that can help deepen client relationships during one of the most emotionally charged times of the financial year.

Smaller gift lists and fewer recipients

Among Americans who are cutting gift spending, the behavior appears more intentional than before.

Two-thirds of that group say they will buy fewer gifts overall, up from 56 percent a year earlier, according to the survey. Nearly half plan to shop for fewer people, rising from 37 percent previously. About half say they will choose lower-cost items.

The trend suggests consumers are not only looking for cheaper presents, but also narrowing the group of people they buy for, a sign of pressure that goes beyond simple thrift.

Dining out, gifts for family and friends, and travel are the top categories where respondents plan to spend less. Travel is taking a particular hit: among those reducing travel expenses, 60 percent say they do not plan to travel at all during the holidays, up from 56 percent the year before. More than seven in ten Americans say gasoline prices are affecting their household finances.

For advisors focused on debt management and year-end planning, the results suggest many households are entering the holidays already stretched.

Inflation remains the main worry

Nearly four in ten Americans say they are more anxious about holiday finances than in past years. Among that group, most point to the rising cost of everyday items, while a large share of all respondents say inflation is hurting household finances as the season approaches. More than a third report having already cut back on essential purchases over the past six to twelve months.

“The holidays can bring pressure to show people we care through spending, but higher everyday costs are forcing many families to make difficult choices about what they can realistically afford,” said Alexander Newby, a financial advisor at Thrivent in Minneapolis. “The goal isn't to spend your way to a meaningful holiday. Start with what you can afford, decide what matters most, and build a plan that takes both into account.”

Advisors watching how younger clients respond to financial stress will recognize that this anxiety crosses generations. More than half of Americans say the current economic environment will affect their holiday spending decisions at least fairly significantly, the survey found.

How advisors can respond before year-end

The practical opportunity for advisors is straightforward. The weeks leading into December are among the best times to talk about spending habits, short-term debt, and how seasonal impulse purchases can turn into bigger planning problems. Advisors who bring up the issue early are often in a stronger position when January reviews begin.

Newby recommends three steps for clients. First, set a realistic spending limit based on current finances rather than last year's budget or social expectations. Second, decide intentionally how that money should be used, whether that means fewer gifts, simpler exchanges, or more shared experiences. Third, avoid financing holiday spending with credit, which can delay retirement progress and create cash-flow pressure in the first quarter of the year.

He said those discussions work best when they are tied to a client's own priorities instead of a generic warning about overspending. Clients dealing with divorce settlements during the holidays may face an even sharper version of the same tension, as the emotional weight of the season collides with financial planning.

The Ipsos survey has a margin of sampling error of plus or minus 2.2 percentage points at the 95 percent confidence level.