Americans Plan to Spend $2,800 This Holiday Season - A Nearly 60% Jump from 2024: BMO Real Financial Progress Index

• Amidst rising costs, 70% of consumers are setting firmer budgets for the holiday season, and over three in five say they are changing their shopping approach due to tariffs
  

CHICAGO, Nov. 18, 2025 /PRNewswire/ - New data from the BMO Real Financial Progress Index finds Americans will spend an average of almost $2,800 this season, an increase of over $1,000 from 2024.

With 62% of Americans saying they have become more concerned about the cost of living over the past three months, they also expect to spend more on holiday-related expenses, including spending $220 on miscellaneous holiday costs this year, up from $140 last year.

The survey also found significant generational differences in anticipated holiday spending:

• Millennial shoppers say they will spend nearly twice as much as the national average, estimating their holidays will cost more than $4,400
• Gen X estimates spending nearly $2,500
• Gen Z estimates spending more than $2,200
• Boomers estimate spending well over $1,600

"The holidays this year come on the heels of a period defined by inflation and price volatility for everyday items, leaving many consumers confused and stressed as they plan for year-end festivities," said Paul Dilda, Head of U.S. Consumer Strategy, BMO. "Against this backdrop, shoppers are changing their behaviors – spending more in some areas, cutting back in others, and trying to build budgets that they can stick to over the holidays."

Holiday Stress or Holiday Savings?

With the peak of holiday season approaching, Americans are feeling the pressure. Nearly two-thirds (63%) say they are more concerned about inflation than they were three months ago, and 57% report growing worries about import tariffs. These concerns are reshaping holiday plans with 62% changing how they shop due to tariff-related price uncertainty.

As Americans plan for rising prices this holiday season, over half (53%) say that thinking about holiday spending causes financial anxiety, with parents of young children at home feeling it stronger than many others (65%) among major demographic groups. Tariff-related uncertainty adds to strain, with 63% of those considering tariffs reporting heightened stress.

To cope, Americans are embracing savings and budgeting tactics to make the season more affordable. 

• Decking the Halls with Care (Not Cash) : Seven in ten (70%) Americans are trying harder to stick to a budget this year, and 45% are cutting down on other gifts throughout the year to splurge during the holidays. Gen Z (58%) and Millennials (56%) are most likely to save with the holidays in mind, compared to 47% of Gen X and just 25% of Boomers.
• Cash Stuffing to Help with Stocking Stuffing? While only 31% of Americans will pay for holiday gifts using cash, Gen Z leads the trend at 34%, compared to 28% of Boomers, perhaps owing to a trend of using a single cash withdrawal to help set firm spending limits on certain categories including gifts, dining out, etc.
• Holiday Shopping Strategies: Some ways Americans are saving money on holiday gifts this year include shopping for sale and clearance items (40%), buying less expensive gifts (37%) and choosing more affordable brands (33%). Nearly one in four (24%) are cutting down their gift list to save money.
• Tariff Tidings: Among the 62% of respondents who are adjusting for tariffs, nearly half (49%) will try to source gifts minimally affected by tariffs, 49% will make purchases earlier in the year to avoid price hikes, and 36% will budget to spend more to anticipate higher costs. For the 38% of respondents who say they aren't adjusting their spending due to tariffs, two-thirds (66%) say they are not considering tariffs in their plans, while one-third (34%) find the timing of tariff effects too confusing to plan around.

Yet not everyone is tightening their belts. Many are prioritizing holiday cheer over long-term savings.

• Prioritizing Seasonal Joy: Close to three in five (57%) say paying for the holiday season they want is important for their mental health, even if it hurts their budget. This view is strongest among Gen Z and Millennials (66% both), compared to Gen X (57%) and Boomers (43%). Meanwhile, 54% of Americans say holiday plans like gift-giving and travel matter more than saving. Millennials lead this trend at 69% agreeing, followed by Gen Z (61%), Gen X (50%), and Boomers (39%). Over two in five (42%) are sacrificing long-term savings to cover holiday costs, including 56% of Gen Z, 57% of Millennials, and 42% of Gen X – compared to just 19% of Boomers.
• Holiday Sales = Slippery Spending Slopes: Over half (51%) say chasing holiday sales and discounts causes them to inadvertently spend more, especially among Gen Z (70%) and Millennials (68%), compared to 51% for Gen X and 26% for Boomers.
• Gift Now, Regret Later? While only 11% say they will use buy now, pay later services this year, 35% say they have used them in the past despite concerns about repayment. Anxiety over this method of spending is highest among Gen Z (50%) and Millennials (53%).

"Balancing the cost of short-term celebrations with long-term saving goals is a serious financial challenge during the holiday season," Dilda said. "This is why it's important to create a realistic spending plan to have the holiday season you want without impeding your real financial progress."

How Americans Are Spending Their Holiday Money

Groceries and travel still top the list of holiday expenses, with Americans planning to spend an average of $590 on groceries and $490 on holiday travel – down about $40 from last year.

Fewer Americans are traveling this holiday season overall: 40% plan on spending on holiday travel this year, down from 45% in 2024. About one in five (20%) have cancelled or postponed travel plans due to rising costs, with nearly half of that group (46%) saying that travel is a lower priority than daily living expenses. Other common reasons Americans postponed or canceled travel include not having funds left after purchasing gifts (32%) and insufficient savings throughout the year (30%). 

When it comes to gift-giving, shoppers will spend the most on clothing ($250), followed by electronics ($220), and toys and games ($120). Other major costs include entertaining ($210), dining out ($220), decorating ($110), and alcohol ($130).

On average, Americans plan on giving less to charity this season: $250 compared to $290 last year. Despite the average donation size going down, more Americans plan to give charitably– 56% compared to 51% in 2024.     

Making Real Financial Progress This Holiday Season

BMO offers the following tips to make real financial progress this holiday season:

• Build a holiday budget: For those among the 70% of Americans who want to stick to a budget for holiday spending, take advantage of the BMO Real Financial Progress Hub, a digital resource with personal finance advice and guidance to create a budget that works.
• Track holiday spending with digital banking tools: To help customers keep track of holiday spending and make sure that they don't blow past their holiday budget, BMO Total Look manages all of a client's BMO and non-BMO financial information – from bank accounts to credit cards, mortgages to loans, and investments – all in one secure location.
• Use points to make festive travel pay back: Using a card that has travel benefits, such as the BMO Escape Credit Card, is one way to turn day-to-day spending into points that can help make holiday travel more affordable.

To learn more about how BMO can help families and individuals make real financial progress, visit https://www.bmo.com/us.

About the BMO Real Financial Progress Index
Launched in February 2021, the BMO Real Financial Progress Index is an indicator of how consumers feel about their personal finances and whether they are making financial progress. The survey aims to spark dialogue that will help consumers reach their financial goals and to humanize a topic that causes anxiety for many – money.

The research detailed in this document was conducted by Ipsos in the U.S. from September 3 to October 11, 2025. A sample of n=2,500 adults ages 18+ in the U.S. were collected via the Ipsos panel. Quotas and weighting were used to ensure the sample's composition reflects that of the American population according to census parameters. This survey has a credibility interval of +/- 2.4 per cent or 19 times out of 20, of what the results would have been had all American adults 18+ been surveyed.

About BMO Financial Group 
BMO Financial Group is the seventh largest bank in North America by assets, with total assets of $1.4 trillion as of July 31, 2025. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to 13 million customers across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and inclusive society. 

SOURCE BMO US