Americans Cut Back on Holiday Spending: Why 2 in 5 Are Buying Fewer Gifts This Year (2026)

A Sobering Holiday Season: Americans' Spending Plans Take a Hit

This holiday season, Santa's sleigh might not be as full as usual, and it's not just because of the reindeer's workload. A significant portion of Americans are planning to tighten their wallets amid economic uncertainties. With roughly two out of five U.S. consumers (42%) intending to spend less this year compared to 2024, it's a trend that's hard to ignore.

The economic landscape has Americans on edge, and it's not just about the holidays. A separate poll reveals that many are cutting back on impulse and luxury purchases, opting for secondhand goods, and even forgoing gifts altogether. But here's where it gets controversial: the impact of tariffs, particularly on lower-income households, is a regressive tax, making it harder for them to afford essentials and leaving them with a heavier financial burden.

And this is the part most people miss: nearly every dollar earned by U.S. toy producers due to tariffs ultimately comes from consumers, hitting low-income families the hardest. According to the National Retail Federation, toy prices could rise significantly, with a potential increase of 36% to 56% under certain tariff scenarios. This could cost consumers a whopping $28.6 billion this holiday season, or about $132 per shopper, according to LendingTree.

But it's not just about the cost of toys. Consumer confidence is wavering, with even financially secure individuals expressing concerns about job stability and a potential economic downturn. The Conference Board's survey highlights this anxiety, showing that people are worried about rising interest rates and a weaker economy.

Among those cutting back, nearly half plan to buy fewer gifts, while others will opt for less expensive options. It's a trend that extends beyond the holidays, with many making conscious decisions to reduce impulse and luxury purchases and embrace secondhand goods.

The National Retail Federation projects a slight decrease in holiday spending compared to last year's record-breaking figures. Americans are expected to spend around $890 per person on gifts, food, and decor, a slight dip from the $902 spent last year. This decrease in spending power is a clear indicator of the economic challenges many are facing.

Beyond the holidays, Americans are feeling pessimistic about their prospects for the new year. While some feel secure about their personal finances, many remain cautious about the future. A significant portion (35%) believes the U.S. economy will worsen in 2026, with concerns about inflation and global trade tensions topping the list.

This consumer caution is evident in major life decisions. Many have delayed or canceled vacations, postponed major purchases like cars, and even put off life milestones like having a baby, getting married, or retiring. It's a clear indication that people are preparing for a potential economic downturn.

So, as we approach the festive season, it's evident that economic uncertainties are taking a toll on Americans' spending plans. With a mix of financial concerns, rising costs, and a cautious outlook, it's a challenging time for many. What do you think? Are you feeling the impact of these economic shifts in your holiday plans? Share your thoughts and experiences in the comments below!