FILE - Shoppers roam around NRG Center during the annual Houston Ballet Nutcracker Market on Nov. 17, 2024 in Houston. (Brett Coomer/Houston Chronicle via Getty Images)
For many, the holiday season represents generosity, connection with family and friends, a celebration of faith – and also, spending money.
While celebrating the season is more than gifts under the tree, it’s also a big time for consumer spending. Holiday sales in 2024 are expected to grow between 2.5% and 3.5% from last year, reaching more than $980 billion, according to the personal finance website WalletHub, which published a report Tuesday on holiday budgets by city.
In fact, the average American is expected to spend $1,778 this holiday season, Deloitte forecasted – noting a "rosier economic outlook" and perceived higher prices.
Coupled with rising average household credit card debt, holiday purchases can have a lasting impact long after Christmas day.
"Depending on the city, an American’s holiday budget this year can range anywhere from just over $200 to more than $4,000, taking into account residents’ income, their existing debt obligations and the cost of living," WalletHub analyst Chip Lupo said.
"Regardless of how well-off you are this season, it’s important to stick to a budget that fits your financial profile so you don’t rack up unsustainable debt and end up in a bad position after the holidays," Lupo added.
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Average holiday budget by city
To determine the U.S. cities with the largest holiday budgets, WalletHub said it compared more than 500 cities across five key metrics: income, age, debt-to-income ratio, monthly income-to-monthly expenses ratio and savings-to-monthly expenses ratio.
The cities with the largest average holiday budgets were identified as Newton, Massachusetts ($4,206), Sunnyvale, California ($3,845), and San Jose, California ($2,828), according to WalletHub's report.
Conversely, the cities with the lowest average holiday budgets were named as Lauderhill, Florida ($217), Hawthorne, California ($396), and Bloomington, Indiana ($419).
- Newton, MA $4,206
- Sunnyvale, CA $3,845
- Palo Alto, CA $3,719
- Mountain View, CA $3,715
- Milpitas, CA $3,659
- Bellevue, WA $3,550
- Flower Mound, TX $3,541
- Fremont, CA $3,483
- Carmel, IN $3,424
- Santa Clara, CA $3,419
- Frisco, TX $3,412
- Naperville, IL $3,407
- The Woodlands, TX $3,395
- Highlands Ranch, CO $3,259
- Sugar Land, TX $3,214
- Cambridge, MA $3,169
- Ellicott City, MD $3,152
- Allen, TX $3,070
- Weston, FL $3,066
- Centreville, VA $3,055
- Cary, NC $2,996
- Plymouth, MN $2,969
- Cedar Park, TX $2,930
- Fishers, IN $2,910
- League City, TX $2,897
- Roswell, GA $2,871
- San Jose, CA $2,828
- Walnut Creek, CA $2,774
- Woodbury, MN $2,757
- Arlington, VA $2,708
- Redondo Beach, CA $2,667
- Plano, TX $2,658
- Bolingbrook, IL $2,616
- San Ramon, CA $2,612
- Union City, CA $2,591
- Troy, MI $2,561
- Redwood City, CA $2,554
- Rochester Hills, MI $2,543
- Round Rock, TX $2,538
- Somerville, MA $2,500
- Olathe, KS $2,500
- Columbia, MD $2,499
- Sandy, UT $2,487
- New Rochelle, NY $2,485
- North Richland Hills, TX $2,484
- Broomfield, CO $2,432
- Buena Park, CA $2,430
- Arlington Heights, IL $2,422
- Scottsdale, AZ $2,421
- Pleasanton, CA $2,394
- Maple Grove, MN $2,390
- McKinney, TX $2,386
- Chandler, AZ $2,369
- Shawnee, KS $2,363
- Eagan, MN $2,342
- Edmond, OK $2,316
- Livonia, MI $2,289
- Seattle, WA $2,264
- Lee's Summit, MO $2,224
- Pearland, TX $2,223
- Germantown, MD $2,210
- Hillsboro, OR $2,203
- Irvine, CA $2,200
- Kirkland, WA $2,169
- San Francisco, CA $2,157
- Rockville, MD $2,156
- Alexandria, VA $2,147
- San Mateo, CA $2,093
- Tempe, AZ $2,087
- Livermore, CA $2,081
- Boca Raton, FL $2,065
- Framingham, MA $2,056
- Nashua, NH $2,053
- Broken Arrow, OK $2,006
- Yorba Linda, CA $2,002
- Richardson, TX $1,980
- Upland, CA $1,968
- Bismarck, ND $1,959
- Boston, MA $1,936
- Cranston, RI $1,933
- Carrollton, TX $1,932
- Mount Pleasant, SC $1,927
- Washington, DC $1,924
- South Jordan, UT $1,920
- Overland Park, KS $1,917
- Thousand Oaks, CA $1,905
- Austin, TX $1,905
- Stamford, CT $1,894
- Gilbert, AZ $1,883
- Torrance, CA $1,872
- Charleston, SC $1,849
- Lewisville, TX $1,848
- San Diego, CA $1,843
- Huntsville, AL $1,835
- Plantation, FL $1,825
- Quincy, MA $1,825
- Norwalk, CT $1,811
- Farmington Hills, MI $1,811
- Silver Spring, MD $1,810
- Carlsbad, CA $1,810
Money-saving tips for the holidays
When trying to avoid overspending during the holidays, experts say to make a list and set a budget.
"For many consumers, overspending happens when they feel time crunched or make snap decisions in response to discounts or limited offers," said Amber M. Epp, a associate professor of marketing at the University of Wisconsin – Madison's School of Business.
"Consumers can save money in the traditional ways by making budgets and lists this time of year, but also by comparison shopping and seeking out discounts for items already on their lists rather than impulse buying when presented with sales."
Another tip is to seek out holiday traditions that have zero or little cost.
"Spending time with family, friends, undertaking your favorite activity like going on a hike, group activities – especially those that allow you to use your brain, move your body, and socialize – can be the things that really make these times special and deal with the underlying stress during the holidays," Dr. Altaf Merchant, a professor of marketing at the University of Washington Tacoma's Milgard School of Business, told WalletHub.
Lastly, avoid impulse shopping and emotional online purchases.
"Influencers on social media, such as TikTok, will continue to have a big social impact on people’s spending decisions," noted Tracy Lu, an associate professor of event planning and customer service at the University of Kentucky.