Holiday wish lists are getting shorter. A new NerdWallet report finds the average planned gift budget has dropped 21%, to $879 from $1,107 last year.
At the same time, a worrying number of shoppers say they may not be able to pay off what they buy. Among people who plan to use buy now, pay later, 38% expect they will not pay in full and on time.
Here is what the survey found, what it says about the way families are spending and how to enjoy the holidays without a January hangover.
The numbers come from the NerdWallet 2026 Holiday Spending Report, based on a Harris Poll survey of 2,060 U.S. adults conducted September 8 to 10, 2026.
The Average Gift Budget Fell 21% To $879
The average planned gift budget this year is $879. Last year it was $1,107, a drop of 21%.
That is a difference of $228 per person. For many families, it means fewer gifts, cheaper gifts or both.
It is a sign that families are drawing a tighter circle around what they spend on gifts.
Most People Still Plan To Spend, Just Differently
The survey found that 92% of people plan to spend on the holidays. Holiday spenders expect to spend $2,525 on average, which includes gifts and other costs such as food, decorations and travel.
Parents feel the squeeze more. Holiday spenders with children under 18 expect to spend $3,417, compared with $2,032 for those without kids.
That is a gap of $1,385, and it reflects the toys, clothes and extra celebrations that come with a houseful of kids.
74% Plan To Use A Credit Card, And 38% Plan Buy Now Pay Later
The survey also looked at how people plan to pay. About 74% plan to use a credit card, and 38% plan to use buy now, pay later services.
Buy now, pay later lets you split a purchase into smaller payments, often with little or no interest at the start. It is easy to sign up for at checkout, which is part of its appeal.
The risk is that small payments from several purchases can pile up without anyone noticing.
38% Of Buy Now Pay Later Users Expect Not To Pay In Full And On Time
This is the number that stands out. Among people who use buy now, pay later, 38% expect they will not pay in full and on time.
That means they already believe they will miss a payment or fall short. Missed payments can bring fees and may affect your credit, depending on the lender.
If you are planning to use these plans, read the terms carefully and add every due date to your calendar.
31% Will Skip Flights And Hotels, Up From 22%
Travel is one place people are cutting back. This year, 31% say they will not spend on flights or hotels, up from 22% last year.
That could mean more holidays at home, more video calls with far-away relatives or shorter trips.
It also means more families are hosting. If that is you, planning your menu and your space now can keep costs down.
Whatever you decide, the survey suggests you are in good company if you are trimming. Millions of households are reworking their lists, and there is no shame in a simpler season.
Seven Ways To Spend Less And Still Make It Special
A smaller budget does not mean a smaller holiday. These ideas keep the joy and trim the bill.
- Set a total number first, and divide it among the people on your list.
- Draw names for a family gift swap instead of buying for everyone.
- Give an experience or your time, like a home-cooked dinner or a day of help.
- Shop your own house first. A decluttered item in good condition can become a thoughtful gift.
- Pay with cash or a debit card for small gifts, so you feel every dollar.
- If you use buy now, pay later, add up all your payments before you agree to another.
- Skip the impulse buys at checkout, and wait a day on anything that was not on your list.
Know Your Number Before You Swipe
The report offers a useful benchmark. If your budget is near $879 per person, you are in line with the average, and if it is far higher, it may be worth another look.
Write down what you can afford to pay off by January, not what you hope to pay. Be honest with yourself, since that is where the stress starts.
If you use a credit card, plan how many months it will take to clear the balance and whether you can do it sooner.
Make The Season About More Than The Spending
Many families tell stories about favorite holidays, and the stories are rarely about the price of the presents. They are about the baking, the music, the games and the people at the table.
A tighter budget gives you permission to lean into that. Start a tradition, make a playlist, bake together and write a note to someone who matters.
Those are the gifts people remember. And they never appear on a credit card statement in January.