Financial experts urge early holiday savings to avoid mounting debt
The holiday season may seem distant, but financial experts say September is the ideal time to start planning your holiday budget to avoid the debt trap that ensnared millions of Americans last year.
In the 2025 holiday season, 37% of Americans accumulated debt, with those who borrowed averaging $1,223—up from $1,181 the previous year. The consequences extended well beyond the festive season: 63% of holiday debtors expected it would take three months or longer to pay off their debt, with 40% facing interest rates of 20% or higher.
The financial burden of unplanned holiday spending can persist for months. Last year, 70% of credit card users expected to carry balances from their holiday purchases into 2026, with 18% anticipating they would still be making payments into summer or later.
Rising costs make planning more critical
Several factors are driving up holiday expenses in 2026. Americans plan to spend an average of $708 on holiday gifts this year, according to a PwC Holiday Outlook survey. Households with children face even steeper costs, expecting to spend $875 compared to $635 for households without children.
Travel expenses add another layer of financial pressure. Airline fares have increased 23.4% year-over-year as of August 2026 compared to August 2025, according to the U.S. Bureau of Labor Statistics. While holiday travel expenses averaged $2,334 in 2025—down 18% from 2024 as many travelers opted to stay with friends and family rather than pay for lodging—airfare inflation is making trips home more expensive than ever.
Overall, total U.S. holiday retail sales are forecast to exceed $1 trillion for the first time in 2026, with consumers expected to spend approximately $890 per person on average during the holiday season.
A practical approach to holiday savings
Financial advisors recommend a straightforward strategy: start saving as early as January and divide your total expected holiday spending by the number of weeks or paychecks remaining until the holidays. This approach transforms a daunting lump sum into manageable incremental contributions.
Starting a savings plan now, in September, still provides valuable time to spread holiday expenses across multiple paychecks. By breaking down the total amount into smaller, regular contributions, families can build their holiday fund without disrupting their monthly budgets or sacrificing long-term financial goals.
The alternative—waiting until November or December to address holiday expenses—often leads to financial stress that extends far beyond the season itself. Survey data from August 2026 suggests the pattern may repeat: 44% of Americans expect to carry additional debt after this year's holiday season, with the largest share, 12%, expecting to owe between $100 and $249.
Beyond the numbers
Creating a holiday spending plan involves more than just setting aside money for gifts. A comprehensive approach should account for all seasonal expenses: decorations, special meals, travel costs, charitable donations, and any traditions that carry price tags.
The key is being realistic about what you can afford while maintaining your other financial commitments. Holiday spending should enhance your life, not compromise your financial security or create stress that lasts into the new year.
By starting now, families can enter the holiday season with confidence, knowing they have the resources to celebrate meaningfully without jeopardizing their financial well-being or starting the new year burdened by debt.
