Consumer Financial Trends: Most Americans Prepare for a Frugal 2025 Holiday Season

As the 2025 holiday season approaches, a recent survey conducted by Achieve highlights a concerning trend among American consumers. The annual Season of Spending Report reveals that nearly 79% of Americans have less than $1,000 saved for holiday expenses, with many indicating a reliance on credit and loans to fund their celebrations. This dire outlook raises red flags about financial preparedness as the season of giving approaches.

Despite the festive spirit that typically accompanies the holidays, the reality for many households is grounded in a chronic state of financial insecurity. About 26% of survey respondents admitted that they haven't set aside any funds for holiday spending. This lack of savings is leading many to consider debt options, including credit cards and buy now, pay later schemes.

Debt and Financial Recovery

The survey indicates that 52% of consumers anticipate incurring debt this holiday season that may linger into the new year. A breakdown of expected holiday debts reveals:

- 29% plan to take on less than $500,
- 11% expect debts ranging from $500 to $999,
- 12% foresee owing more than $1,000.

While some consumers feel optimistic about recovering financially post-holidays, with 54% believing they will manage fine without any tough recovery period, a significant 30% expect to be back on track by March. Conversely, 16% predict that they may take until April or even longer to stabilize their finances.

Cautious Holiday Spending Patterns

The financial anxieties driven by rising costs and economic uncertainty are leading to a shift in consumer spending habits. The survey revealed that a majority of people are keeping their holiday purchases in check. Specifically, 55% of respondents intend to maintain the same number of gifts as last year and 51% plan to spend approximately the same amount.

Moreover, 32% stated they would buy fewer gifts this year, and 28% anticipated reducing their overall holiday spending compared to 2024. Interestingly, only 14% aspire to increase their gift-giving, while a mere 20% look forward to spending more money than in previous years.

The Mental Strain of Holiday Spending

According to Achieve analyst Austin Kilgore, these findings reflect a broader trend of frugal thinking among Americans in light of economic pressures. He noted, "In a year marked by economic uncertainty, price hikes, and high interest rates, it’s clear that consumers are entering the holidays with a cautious mindset. This suggests a general trend of spending retrenchment, despite the usual optimism that holidays bring."

Even though many consumers express confidence about managing their financial situations—55% claim to be