Survey: 2023 Holiday Spending Will Leave Almost Half Of Americans in Debt

Black Friday is no longer just a single day devoted to shopping: the deals and promotions started this year while stores were still stocking Halloween candy.

But there’s a dark side that comes along with holiday shopping and celebrations – 48% of Americans will end up further in debt.

More than 5% said they’ll have to skip paying an essential bill in order to cover holiday expenses.

Table of contents

  1. Key takeaways
  2. Other findings
  3. The bottom line
  4. Methodology
  5. If you need help
  6. Ask the experts

The National Retail Federation says retail sales during November and December are expected to reach record levels during November and December and will grow between 3% and 4% over 2022 to between $957.3 billion and $966.6 billion.

Consumer debt is also hitting record levels – total household debt increased by 1.3% to hit $17.29 trillion in the third quarter of 2023.

This will affect more than pocketbooks. Additional debt means more stress, depression and other effects on mental health when the new year rolls around.

“Going into debt due to holiday spending has major drawbacks for your mental health,” said Maryam Kia-Keating, Professor of Clinical Psychology at the University of California, Santa Barbara Department of Counseling, Clinical, and School Psychology.

How much debt are Americans willing to take on? DebtHammer set out to learn. We surveyed 1,085 Americans to learn more about holiday spending habits, borrowing practices and the psychological impact of holiday shopping.

Key takeaways

High grocery and gift prices are a major concern: More than 35% said they’re worried about food and grocery costs over the holiday, while another 33% cited fears about higher gift prices and 32% cited fears about overspending. Other major concerns include being unable to afford the items they want (21%), disappointing the family (26%), inability to afford the items they want to buy (20%), having to cancel travel plans due to high costs (8%) and worries about job security (7%).

The toll is more than financial: Almost 70% of survey respondents said the holidays would have some sort of psychological toll on their mental health. These include increased stress (34%), worry about money (23%), some form of depression (33%), anxiety that keeps them up at night (12%) and feeling alone or left out (9%). About 23% said holiday spending makes them feel happier.

Politics will affect spending: Amid economic uncertainties, rising inflation and the looming prospect of a government shutdown, about 51% said they planned to cut back their spending this year, while 14% are uncertain.

More findings

Families can’t make it until payday: 30% of respondents who are planning to take on debt this year said they’ll turn to short-term loans, including payday loans, title loans, cash advance apps like Dave and employer-sponsored earned wage apps. Some of these options charge interest rates equivalent to 300% APR or higher.

Buying now, paying later: 16% said they’ll take advantage of Buy Now, Pay later plans that allow them to buy items and pay them off in four or more installments. About 17% plan to use a credit card and pay it off over time. About 8% will use a personal loan.

Inflation’s still a factor: Over half of the participants (51.43%) said that inflation and the current state of the U.S. economy were a factor in 2023 holiday spending plans, while 34.73% reported no impact, and 13.84% are still unsure.

Most plan to spend less than $1,000: Almost three quarters of survey respondents said they plan to spend less than $1,000 this year, while 7% said they would spend more than $2,000. About 53% said they’d spend about the same amount they spent last year, while 28% said they plan to spend more than last year.

Americans are still using payday loans: 26% admitted to using high-interest short-term loans, while 6% said they don’t know whether they’ve borrowed from a payday lender.

The bottom line

Anytime you turn on the TV from Nov. 1 on, you’re inundated with commercials showcasing a “perfect” holiday season, and everyone wants to achieve that perfection. But ask yourself whether one day in December is worth the struggle to pay off several months of debt in the aftermath.

Kia-Keating says finances play a key role in stress levels.

“When people spend more than they have, or go into debt, their stress multiplies,” she said. “Financial stress often increases conflict in family relationships, because of the spending itself when partners don’t agree, or because of the sacrifices involved in trying to pay back the debt.”

And Dorothy Kelly, Robert B. Hardaway Jr. Lecturer of Personal Finance at the University of Virginia McIntire, says spending a lot of money on young children is unnecessary.

“They can be satisfied with one toy, and it does not necessarily have to be brand new,” Kelly said. “Good quality used (and sometimes unused) toys can often be found at yard sales, Goodwill, Salvation Army, Craigslist, Facebook Marketplace, Nextdoor, etc.”

Kelly said that if your children are older, now is the time to start educating them about money and priorities.

It’s not always the cost or even the gift that families remember. Often it’s the experience that matters.

Kelly described how for years, she sent her son on a holiday scavenger hunt to find his Christmas gift. Though the scavenger hunt took a lot of time to organize, there was zero cost, and her son described it as his favorite thing about Christmas. A colleague was even envious of the family tradition.

“Give the gift of memories,” Kelly said. “They are priceless and last decades longer than toys and other gifts.”


DebtHammer surveyed 1,085 individuals on November 8. All respondents earned less than $250,000 per year. About 59% of respondents were female and 41% were male.

Age group breakdown is as follows:

18-29: 18%
30-44: 28%
45-60: 29%
60+: 25%

If you need help

If you feel suicidal or need immediate help, 988 will route callers to the National Suicide Prevention Lifeline. If you live in an area where the 988 code hasn’t yet been implemented, please call 1-800-SUICIDE for help. The 988 Suicide & Crisis Lifeline is a national network of local crisis centers that provides free and confidential emotional support to people in suicidal crisis or emotional distress 24 hours a day, seven days a week in the United States. Counselors are committed to improving crisis services and advancing suicide prevention by empowering individuals, advancing professional best practices, and building awareness.

Ask the experts

What’s the one piece of advice you’d give to anyone planning to go into debt due to holiday spending?

Laura Gonzalez

Associate Professor of Finance, California State University, Long Beach

It is imperative to budget because prices continue rising and debt is becoming increasingly more difficult to pay with rising interest rates. Especially credit card debt because interest rates are very high and minimum monthly payments can lead to living above our means. In addition, unemployment is expected to start rising within a few months.

Dorothy Kelly

Personal Finance Lecturer at the University of Virginia McIntire School of Commerce

Do not do it. No one who cares about you would want you to go into debt to buy holiday gifts. Your family and friends do not need expensive gifts. They need (and deserve) your love and attention. If money is tight, get creative. Make them gifts. If you are not creative, you can look online for wonderful creative ideas.
If you are not crafty, or are all thumbs, you can give a gift of your time — a coupon book filled with redeemable coupons for a hug, a household chore, a fun baking session, a cooking session, a walk in the park, a singalong, movie night, game night, a home manicure, anything that you and your friends/family enjoy doing together. Your time is your most valuable resource, spend it on them rather than on shopping or worrying about bills.

Lawrence White

Professor, Stern School of Business, New York University

Don’t! But, if you have to go into debt: Try really hard to keep it under control — keep track of your spending and credit card obligations, etc., and try to look forward and develop a repayment schedule. And as you consider buying gifts, keep remembering: It really is the thought that matters — and not the amount that is spent on a gift.

Steven Meyers

Professor in the Department of Psychology at Roosevelt University

People need to consider both finances and psychology when they are looking at the possibility of going into debt due to holiday spending. Both elements are important. On the financial side, people often consider issues such as how much they want to spend, how deep will the created debt be, and what is the rate of interest, and how long will it take to pay off. There are also psychological questions at play as well. These can include: “What does the gift recipient truly need in order to know that I care about them or to make them happy?;” “How much is really enough?;” or “Other than generosity, are there other emotions that are at play that are influencing my gift giving choices?” Sometimes we realize that this emotional side of spending, even if it is buying for others, is more complicated than we believe at first thought. Taking a few moments to think about these psychological aspects may influence the extent to which people incur debt.

What steps, in your opinion, can people take to help them stay on track with budgeting this holiday season?

Peter Harms

Associate Professor of Management for the Culverhouse College of Business at the University of Alabama

Have a plan in place before you start. Figure out how much you can afford to spend, your capacity to pay it back, and what the timeline for doing so will look like. With surging interest rates, debt is going to increasingly be a burden to deal with so a planful, balanced approach will serve you best. Holiday shopping tends to disrupt our good intentions when it comes to finances because it can be very emotion-driven since we believe that we’re doing something nice for others. But we need to take care of ourselves as well.

Maryam Kia-Keating

Professor of Clinical Psychology for the UCSB Department of Counseling, Clinical, and School Psychology

Even though giving to loved ones is a positive sentiment, associated with holiday joy and generosity, spending more money than you have is unlikely to be worth it in the end. Not only can it add stress and burden to your own budget in the new year, but it can create tensions, such as creating too much pressure in relationships to purchase expensive, rather than meaningful, gifts. A great way to stay on track is to plan ahead. List the people who you want to gift over the holidays, including loved ones, as well as people who support your family, like teachers, and give yourself a maximum spending budget for each gift. Come up with ideas for gifts that don’t have to cost as much but are truly meaningful, like something personalized, or a framed photograph of a cherished memory. Within large families or groups, consider drawing names and each person getting one person a gift, so that everyone receives something but no one is going out of budget. You can make it fun and memorable with a gift-exchange game, creative ways of wrapping gifts, and including time for sharing stories. Think of ways to reuse, recycle, and upcycle gifts to protect our planet.

Deborah Cohn

Interim Dean, School of Management, New York Institute of Technology

Planning. It may be a bit late to start saving and putting away a little bit each week but doing that makes the most sense. I understand that you want to express love and connection with your gifts. It’s time to make deals with your friends and family that everyone will keep the costs down. Agree on budgets among gift givers. Talk about what everyone can afford to spend and set spending limits. Consider pooling your funds with friends and family and chipping in for gifts. This is made easy with online payment methods such as Venmo. Think creatively. There are gifts you can buy for your friends and family that are within your budget and communicate a positive message. Consider experiences over things, and enjoy time together with your loved ones.

Lawrence White: To quote Nike: Just Do It! Set saving goals; write them out, print them, and post them on your refrigerator. If saving is difficult, start small — but start. And take advantage of the automatic saving plans (that are often described in terms such as “Pay Yourself First!”) that are offered by many financial institutions.

What’s the most important piece of advice you have to help get people started on a savings plan for next year’s holiday season?

Maryam Kia-Keating: Find your personal motivation to save. You might have something special you want to purchase, or a place you want to travel. Stay focused on the goals that you are truly excited to work towards and getting started on, and sticking to, a savings plan will be much easier and more fun!

Peter Harms: It is easier to save when it is automated. Many employers or banks will have programs that automatically deduct money and put it into investments or special savings accounts before it ever hits your primary accounts. Because it happens before you see it, you are less likely to miss it. And you won’t be faced with a decision every month about whether to dedicate your remaining finances to long-term plans or short-term pleasures (which win the debate all too often). It doesn’t have to be a lot. If you’re new to saving, start with 1%, get used to it, and then gradually increase the percentages over time. Don’t put yourself in a situation where you have to raid your savings account to make emergency bill payments.

Laura Gonzalez: Every small amount can make a difference so long we are constant. Two or three hundred dollars invested in index funds every month starting in our twenties can prepare us for retirement. Sound investing is not exciting, but it is safe.

Steven Meyers: Most behavioral research shows that people can set money aside most easily if they automate the process and do not need to continually re-visit a hard decision. Automated transfers of money into a separate account each month makes saving more likely to occur. Sometimes people need to be cued or reminded about their longer-term goal (e.g., posting a picture of their child opening a holiday gift) in order for them to prioritize it over a competing short-term need.

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