Growing up, I was always pretty fortunate when it came to receiving Christmas gifts. My dad was an only child and my only other sibling was a younger sister, so my paternal grandparents (specifically grandma) really loved to spoil us. But hey, I didn’t complain.
Now that I have started my own career and my own family, my wife and I began to wonder what the average American spends on Christmas. I figured now would be as good of a time as any to really peel back the first layer of the fruit cake and see what’s lying underneath from an economic standpoint.
As one can only assume, holiday spending for the average American dramatically decreased right after the 2008 recession to $417 (for reference, holiday spending in 2001 was over $1000). Since that time, things have only looked up as Americans in 2016 averaged about $929 on gifts.
Well, how much should I spend?
Honestly, as a financial advisor, I have yet to receive this question from a client - perhaps people are afraid to hear the answer that I would give them so they avoid asking. I would be a violator myself to not budget my own holiday spending simply because I wanted to get my loved ones something I think they'd really like. A giving heart is an admirable trait to have, but it’s also important to really set that holiday budget reasonably.
The average income per capita in 2016 was $46,550 and the average for holiday spending was $929. If you want to do the good ole Dave Ramsey try, just use the averages to figure out what you should spend.
Now undoubtedly, this is just an outline, but it should give you a pretty good idea of where you should be at if you want to be, well, you know, average. When you think about it in percentage form it’s right around 2% of your annual income that you are spending on Christmas gifts. To some that may seem really high and to others might seem really low, it’s honestly just a personal thing.
While Christmas shopping is fun (especially now that you can do it from the comfort of your own home) it’s still important to track your spending and how it affects your overall financial picture as you head into the new year. Or, roll the dice and hope you made it onto the nice list this year. Don't forget to take advantage of those sale prices, happy shopping, and have a Merry Christmas!
financial advisor, economics junkie, sports fanatic
"Money is tough, it's something that we all use on a daily basis, yet it doesn’t ever come with instructions. If you have questions, reach out to me or someone else at Fischer Wealth Management so we can help you achieve what matters."