Santa’s budget is shrinking. NerdWallet’s 2026 Holiday Spending Report finds that shoppers who buy gifts expect to spend $879 on average, about $880, which is down 21% from $1,107 last year.
NerdWallet personal finance expert Kim Palmer says the reason is plain: prices have gone up in many categories, and families are pulling back. She also has a warning about one popular way to pay for presents.
Why Families Are Cutting Back
Palmer says inflation and higher prices are pushing people to cut back, and the survey backs her up. The Harris Poll surveyed 2,060 U.S. adults for NerdWallet from September 8 to 10, 2026, with a margin of error of plus or minus 2.7 percentage points.
About 82% of adults are gift buyers. Among them, 46% plan to spend under $500, and 31% plan to spend $1,000 or more.
People are trimming more than presents. The report found 28% plan to cut back on non-holiday spending, such as dining out or groceries, for a few months to make up for the holidays.
Palmer says the squeeze is showing up in travel as well as in the gift aisle. Families are weighing every purchase this season, and the numbers show it.
Travel Is Taking A Hit Too
Gifts are not the only line item getting squeezed. The report found 31% of Americans will not spend on flights or hotels this year, up from 22% in 2025.
Still, 42% of people plan to travel, similar to 45% last year. Those travelers expect to spend an average of $2,439, compared with $2,586 in 2025.
Parents are the biggest travelers. Some 62% of parents with children under 18 plan to travel, compared with 33% of other adults.
Buy Now Pay Later Can Hurt Come January
Here is the part Palmer wants you to hear. “We found that people are turning to buy now, pay later, where you can spread out payments over several months,” she says.
Then comes her warning: it is “a form of debt and you have to pay it back eventually, so that can be difficult once January hits.” The report numbers show why she is concerned.
About 38% of holiday spenders plan to use buy now, pay later plans. Of those users, 38% expect they will not pay in full and on time, compared with 25% of credit card users.
In other words, the people choosing the pay-over-time option are the ones most worried about keeping up with it. Another 74% of holiday spenders plan to use a credit card for their holiday expenses.
Her point is that a payment plan feels small when you start it. It is the stack of those payments, arriving after the holidays are over, that causes trouble.
Palmer’s Advice, Start A List And Spread It Out
Palmer’s first suggestion is to make a shopping list early and spread purchases over several months instead of buying everything in December. Smaller bites are easier on a checking account than one giant bill.
She also says to track the items you want and wait for sales, because prices often dip closer to the holidays. And she urges shoppers not to dip into emergency savings for gifts, and to stick to the list and resist impulse buys.
Palmer has a favorite trick for slowing down. She says: “Letting something sit in your cart for 24 hours is one of the easiest ways to decide if you actually want it.”
More Ways To Slow The Impulse
NerdWallet’s experts also suggest removing saved credit cards from retailer apps, so a purchase takes a bit more effort. Setting rules for yourself, such as no shopping late at night, helps too.
Being open with friends and family is another idea. Palmer suggests telling loved ones you plan to spend less so everyone can scale back together.
Most shoppers already have a plan in mind. The report found 86% intend to use at least one money-saving strategy, with coupons at 42% and shopping sales at 41%.
The complete findings are in NerdWallet’s 2026 Holiday Spending Report.
A Simple Holiday Budget You Can Make This Weekend
Start by writing down the people you buy for and a dollar figure next to each name. Add it up, and then subtract anything you cannot comfortably pay for with cash on hand.
If the total is high, talk about it now. Many families are glad to switch to a drawing of names, a small gift limit or a group present for the grandkids.
Shop a little each paycheck from now until December rather than all at once. If you use a card, plan how you will pay it off in January before you swipe it, and if you use a pay-over-time plan, add every future payment to your calendar so none surprises you.
Remember that the best gifts are often the cheapest. A framed photo, a handwritten letter or a homemade dinner is not on any sale flyer, and it tends to be the one people remember.
The average family is spending less this year, and that is no cause for shame. A smaller budget that you can pay off by February beats a big one that follows you into spring.
