Parents with young kids feel pressured to spend more than they should on holiday gifts
Parents are feeling pressure to spend more money than they're comfortable with on holiday gifts this season, a new survey reports.
Parents of children under 18 who plan to purchase gifts this holiday season say they'll spend $1,070 on average compared with $860 their peers whose children aren't minors plan to spend, according to a new survey by NerdWallet.
"For a lot of parents, they want to make sure their kids are having a really happy festive season, and so a motivating factor is spending on your young kids just make them so happy," said Kimberly Palmer, a personal finance expert with NerdWallet.
Forty-eight percent of those parents with younger children say guilt is leading them to spend more than they should on gifts, according to the survey.
Here are some other key findings about parents of younger children who plan to buy holiday gifts this year:
- 12% will prioritize buying gifts over paying some of their regular bills this holiday season.
- 38% say they will go into more debt than usual to buy gifts this year.
- 15% will purchase some secondhand gifts.
- 13% will probably need to use some of their emergency savings to pay for gifts.
- 29% say they’ll purchase gifts for fewer people than they did in years past.
Some shoppers adding debt to last year's holiday debt
Additionally, in NerdWallet's 2024 Holiday Spending Report, nearly 3 in 10 Americans, or 28%, of Americans who used credit cards to pay for holiday gifts last year still haven't paid off their balances. Similarly, nearly 3 out of 10 holiday travelers who put flights and hotel stays on credit cards last year still haven't paid off their balances.
Ten percent of all respondents – not just the parents – also said they'd probably need to use some of their emergency savings to buy holiday gifts and 9% will prioritize buying gifts over paying some of their regular bills this holiday season.
That can be dangerous, Palmer said.
Holiday cheer: Why a new survey expects shoppers to spend more this holiday season
"Holiday gifts are generally not considered to be an emergency," she said. "Emergency savings are usually for things like an unexpected bill or if you lose your job."
Consumers who find themselves dipping into their emergency savings or budgets for everyday expenses to pay for holiday bills might want to have a bigger conversation about scaling back on the holidays, Palmer said.
Debt can be a dangerous cycle, said Jamie Young, managing editor of loans, mortgages and credit cards for Paste BN Blueprint, a personal finance content partner to Paste BN.
"If you’re still paying off debt from last year’s festivities, remember that those are still costing you today − and costing you even more than they were originally. If you add more debt onto that for this year’s holiday spending, you’re now on the hook for a greater amount, making it that much more difficult to get on top of your debt and pay it off for good.
"It’s easy to get caught up in holiday spending because we want everyone we love to have the best holiday and the best gifts, but none of it is worth taking on debt,'' Young said. "It’s fine to purchase gifts, but maybe limit who you’re buying gifts for to just your immediate friends and family."
Families may also consider starting a new tradition of doing a "white elephant" or "secret Santa" gift exchange for bigger groups to cut down on the need to buy as many gifts, she said.
Additionally, reusing holiday decorations and hosting smaller gatherings or potlucks can help keep costs down, she said.
Tips to manage holiday spending
Here are some tips from NerdWallet to help with holiday shopping planning:
- Create a budget. It's important to not only create a holiday shopping budget, but also a budget to have money set aside for emergencies, to pay bills and to manage your debt.
- Consider shopping secondhand. Thrifting has grown in popularity among teens and young adults, so consumers could look for creative ways to make sure they're giving gifts without blowing their budgets, Palmer said. Younger kids may not care where their gifts are coming from, so buying secondhand or regifting could be an option, she said.
- Declutter your holiday gift list. Nearly 3 in 10 parents of children under 18, or 29%, said they'll purchase gifts for fewer people this year than in years past.
- If you use buy now, pay later, be prepared to pay it off. Increasingly, consumers are using buy now, pay later methods, which allows consumers to pay for a purchase over time, often without interest or late fees. It is still a form of debt, Palmer said, so make sure you have plans to pay it off.
Betty Lin-Fisher is a consumer reporter for Paste BN. Reach her at blinfisher@USATODAY.com or follow her on X, Facebook or Instagram @blinfisher. Sign up for our free The Daily Money newsletter, which will include consumer news on Fridays, here.