Each December, Americans crowd shopping centers and scroll online storefronts with one goal: to make the holidays memorable. But for many, the memories come with a side of regret—and a growing pile of debt.
According to data from LendingTree, 36% of Americans went into debt during the 2024 holiday season, up from 35% the year before. The average amount borrowed was $1,181, a figure that has steadily risen since 2015, when it sat below $1,000.
Perhaps more troubling: only 44% of those who went into debt had planned for it. The rest entered the new year with balances they hadn’t budgeted for—and interest rates they couldn’t ignore.
Now, with October marking Financial Planning Month, personal finance experts are sounding the alarm. If there’s ever a time to break the cycle, it’s now.
The True Cost of Holiday Cheer
The pressure to participate in gift-giving, travel, and family traditions has long been a financial stressor. But today’s economic environment adds another layer. Persistent inflation, rising interest rates, and consumer optimism have created a perfect storm of overspending.
Among those who went into debt last holiday season:
- 60% reported feeling stressed about it.
- 42% said they regretted spending as much as they did.
- 21% expected it would take five months or more to pay it off.
- 20% said they were only making minimum payments.
Most of this debt landed on credit cards (65%) or store cards (24%), with interest rates often exceeding 20%. And while tools like “buy now, pay later” offer short-term relief, 31% of holiday shoppers used these programs for at least one gift—further stretching future paychecks.
“The data shows a widening disconnect between spending habits and long-term planning,” says Michael A. Scarpati, a certified financial planner and CEO of RetireUS. While Scarpati isn’t sounding the alarm on small splurges, he does urge consumers to build in awareness.
Financial Planning Month: A Timely Opportunity
The month of October has quietly become a staging ground for holiday preparation, even if few Americans recognize it that way. Financial Planning Month, first observed by advocacy organizations and certified planning professionals, encourages consumers to review their budgets, clarify their goals, and reassess habits ahead of year-end decisions.
For families hoping to avoid repeating last year’s mistakes, October offers a reset button. That means:
- Setting realistic spending limits for holiday gifts and travel.
- Tracking recurring expenses that add up quickly—such as subscriptions, holiday meals, or seasonal decor.
- Starting early, rather than relying on last-minute purchases that often come with higher costs and fewer deals.
Perhaps most importantly, it’s a time to begin conversations, especially for parents, couples, and caregivers who share financial responsibilities. Expectations around gift-giving—particularly for children—often drive the kind of emotional spending that leads to long-term regret.
Who’s Feeling It the Most?
The burden of holiday debt isn’t evenly distributed. LendingTree’s findings show that parents of young children, millennials, and those earning under $50,000 per year are most likely to go into debt for holiday spending. In fact, nearly half (48%) of parents of young children reported carrying debt into the new year.
Even high earners aren’t immune: households making over $100,000 annually took on $1,429 in debt on average, suggesting that income doesn’t always translate to planning.
Looking Ahead: Avoiding the 2025 Debt Trap
Financial literacy advocates say there’s still time to shift the pattern for 2025. That includes prioritizing what matters, cutting out excess, and considering options like sinking funds—where money is set aside monthly all year for known future expenses.
And for those still paying off last year’s bills? Experts urge against panic. Instead, they recommend strategies like debt consolidation, automating payments above the minimum, and reviewing financial statements to better anticipate next year’s costs.
Ultimately, the holidays are about connection and generosity. But they shouldn’t come at the cost of next year’s peace of mind.
