More Gifts, Less Guilt: Americans Embrace Festive Spending Despite Economic Worries

A man looking happy about a purchase with his credit card in hand around the holidays.

Achieve's post-holiday survey finds nearly twice as many people spent more money than anticipated on holiday purchases. While only 9% expected to overspend pre-holiday, the post-holiday poll in January 2024 reveals the truth. Spending skyrocketed to 18% as people fell prey to the power of holiday temptation.

Despite inflation jitters and rising interest rates, American shoppers defied expectations by spending big in December.

The National Retail Federation also reports a 3.8% increase in United States retail sales for the 2023 holiday season, pushing the total to a record $964.4 billion in holiday purchases. Americans spent more this holiday season than in 2022.

Gifts Are the Culprit Itself

While 17% of respondents in the pre-holiday survey confidently claimed they would come in under budget, the post-holiday reality proved less rosy. Only 9% actually stuck to their spending plans, a significant gap between intentions and results.

In 2023, 34% of respondents reported that the number of gifts they bought influenced their holiday spending more than anything else, including changes in the number of recipients or individual gift prices.

The number of respondents who reported staying on budget remained consistent.

Impact of Inflation

Consumers breathed a sigh of relief as inflation tumbled from a hefty 6.5% at year's start to a more manageable 4% by December. The holiday cheer wasn't dampened by inflation! 

Also, 66% of shoppers found their 2023 purchases just as valuable as those from the previous year, with only 21% noticing a drop in quality or quantity.

Stronger Job Market

Despite a slight slowdown from recent trends, the U.S. job market remained robust in December, adding 223,000 jobs and pushing the unemployment rate back to its pre-pandemic low of 3.5%.

Higher Wages

According to a recent Treasury report, U.S. real wages have increased 0.8% over the past 12 months, exceeding the pre-pandemic average. This income growth has boosted consumer purchasing power, with the median worker now able to afford the same goods and services as they could in 2019, along with an additional $1,000.

Holiday Cheer Without Remorse: Most Americans Happy With Their Festive Spending

Only 10% of respondents admitted remorse about their household's holiday spending; the sentiment was nearly twice as strong among Gen Z (17%) compared to older generations (Gen X and boomers at 8% each). Younger generations might be more prone to buyer's remorse after holiday splurges.

Festive Cheer Does Come With a Price Tag

Despite the festive cheer, around 40% of Americans were wrapped in holiday debt this year. They'll carry over bills from their seasonal spending, with nearly half of this group relying on debt to cover more than 25% of their holiday expenses.

The majority, thankfully, managed to keep debt at bay, but for those still digging out, their festive purchases might come with some post-holiday financial blues. Here are some tips to tackle post-holiday debt and regain control faster:

Assess Your Overall Financial Position

List your outstanding debts, including their amounts, interest rates, and minimum payments. This gives you a clear picture of the financial burden.

Make a Plan

Focus on paying off high-interest debt faster than the ones with lower interest. Also, there may be certain purchases where the interest doesn’t start accruing immediately. Use this to your advantage by prioritizing debts with immediate interest, leaving the grace period purchases for later. 

Explore Lower Interest Options

Balance transfer is an excellent way to transfer high-interest credit card balances to a card with a lower introductory interest rate. This can buy time to pay down the debt without incurring additional charges. Also, consider consolidating debts into a single loan with a lower interest rate.

Return the Unwanted Gifts

The holiday rush can lead to overbuying, with some people grabbing extra gifts and possibly returning them later. Still, those items often get stuck in drawers and closets, never returning to the store. If you're facing post-holiday debt, consider returning those unused gifts before the return window closes to recoup some cash.

Cut Down on Expenses and Boost Income

Look at your spending and find things you don't need, like fancy coffee or unused subscriptions. Cutting down on those things allows you more money to pay off debt. Also, try to earn extra cash by doing freelance work, watching pets, selling stuff you don't use online, or taking up odd jobs. The more money you have coming in, the faster you can pay off your debt. 

The holiday season may be over, but its financial impact lingers. By taking proactive steps and adopting innovative strategies, Americans can manage their post-holiday debt and ensure that the festive cheer doesn't become a financial burden.

This article was produced by Media Decision and syndicated by Wealth of Geeks.

Author: Anika Jindal

Title: Fact checker

Expertise: Personal finance


Anika Jindal is a journalist and seasoned Certified Public Accountant (CPA) with over ten years of experience in the financial industry. Drawing upon extensive expertise in personal finance, Anika is passionate about empowering individuals to make informed financial decisions through simple money management and frugal living tips.

Anika Jindal is a member of the AICPA and a frequent contributor to What Anika Says, Wealth of Geeks, Media Decision, MSN, and Associated Press, providing valuable insights on retirement, saving money, and frugal living.