As the holiday season approaches, American consumers are preparing for a surge in spending despite ongoing financial concerns. Economists project that total holiday expenditures in 2025 will surpass $1 trillion for the first time, marking a 4% rise compared to the previous year. However, when adjusted per individual, average spending appears to have declined, indicating a shift in consumer behavior. n nAccording to Golnaz Baradaran Motie, an assistant economics professor at Western Kentucky University, higher-income households are primarily responsible for the overall increase in spending. In contrast, lower-income families continue to feel the strain of rising costs and are adjusting their budgets accordingly. n nRising prices are a major concern, with approximately 70% of consumers anticipating inflation during the holidays. When economic uncertainty looms, households tend to reduce discretionary expenses first—particularly those related to leisure, entertainment, and non-essential purchases. n nData shows that spending on dining out and travel has already begun to decline among economically vulnerable groups. To manage finances effectively, Motie advises starting holiday preparations early and leveraging tools like cash-back apps such as Ibotta. n nShe also highlights the benefits of using credit cards that offer rewards or cash-back incentives, provided users maintain disciplined budgeting habits. Rather than focusing on the volume of gifts, she recommends prioritizing meaningful experiences or fewer, higher-quality presents. n nExperts also suggest using technology, including artificial intelligence, to monitor price fluctuations and secure deals at optimal times. Strategic shopping can help stretch household budgets without sacrificing the spirit of the season. n— news from WBKO
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Holiday spending expected to reach record highs despite economic concerns
BOWLING GREEN, Ky. (WBKO) -Many Americans are feeling financial strain as Christmas and other gift-giving holidays approach, prompting local financial experts to offer advice on navigating the current economic climate. n nThe holiday season typically sees some of the highest spending of the year, and economists say 2025 is no exception, with spending estimated to reach record highs. n n“Things like the holiday spending will actually for the first time cross $1 trillion, so it has increased about 4% compared to last year, but per person, spending seems to have gone down even though the total has increased,” said WKU assistant economics professor Golnaz Baradaran Motie. n nMotie said high-income households are the main drivers of increased spending, while low-income families remain concerned about increasing holiday expenditures. n nFinancial uncertainty stemming from tariff negotiations and the recent government shutdown has led many consumers to expect higher prices this holiday season. n n“Around 70% of people think that the prices are going to be higher. Customers, when they are cautious, will cut down the entertainment first, so anything that they would consider luxury or leisure spending would go first,” Motie said. n nSpending on dining and travel is trending downward among lower-income families, according to Motie. n nMotie offered several strategies for families to make their money stretch further while ensuring holidays remain enjoyable. n n“Start early and try to utilize a lot of the opportunities that are already available, such as ibotta, apps that allow you to get cash back,” Motie said. “If you are disciplined with your personal finances, you can use a lot of the credit cards that offer a lot of cash back or points for traveling, which would be helpful.” n nShe recommended focusing on quality over quantity this year, suggesting experiences rather than multiple gifts under the tree. n nEconomists suggest shoppers start hunting for holiday deals as early as possible and utilize artificial intelligence to track pricing trends to purchase items at their lowest prices.