Holiday Spending Could Hit Over $1 Trillion This Season: How Homeowners Are Budgeting Going Into the Holidays

Budgeting this holiday season has become complicated.

The National Retail Foundation (NRF) projects holiday hiring will dip to its lowest level in at least 15 years in 2025. Yet, despite this, holiday spending is expected to hit a record of between $1.1 trillion to $1.2 trillion from Nov. 1 through Dec. 31, marking the first time it will ever surpass $1 trillion.

For homeowners with mortgage payments, increased utility bills, and property taxes due, spending any kind of money this time of year requires careful strategy and planning.

But you can enjoy the next couple of months without breaking the bank.

How this holiday season affects homeowners 

Cary Sinnett, certified financial planner and senior manager at American Institute of CPAs (AICPA) in Kansas City, MO, explains that even though inflation is cooling, it may not still feel like it for many.

"Grocery prices are still up, services still cost more, and mortgage rates have reset household psychology," Sinnett explains.

For example, homeowners who bought or refinanced at 2 or 3 percent feel locked in and are trying to preserve that advantage. Many of them are keeping holiday spending flat in dollar terms, which in real terms means trimming.

According to Claudia Valladares, director of client relations at 11 Financial in Lufkin, TX, a lot of homeowners are planning early and staying simple.

“Look at what you actually want to buy, what that’s going to cost, and give yourself a real number to work with. You don’t have to go all out to make it special,” explains Valladares.

Valladares explains that more homeowners are choosing smaller gatherings, scaling back on travel, or focusing on one or two meaningful gifts instead of trying to buy for everyone.

“The biggest shift is people wanting to enjoy the holidays without paying for them later,” says Valladares.

Sinnett agrees and explains that the healthiest holiday budgets are not built around deprivation or racking up credit card bills. Instead, they're all about clarity.

"When families anchor spending to their values, the holidays get better—and the credit card statements get smaller," adds Sinnett.

Ways to balance the cost of homeownership and holiday fun

With smart planning and a bit of creativity, you can enjoy the holiday season without straining your finances or neglecting your home. Here are several holiday spending tips from experts.

Set a budget

“If you’re juggling a mortgage, utilities, and all the regular bills on top of gifts and food, give your money a plan,” explains Valladares. Set a total budget before you start holiday shopping.

When setting your budget, outline all of your essentials first (such as bills and groceries) and then allocate what’s left for gifts and entertainment costs.

“The key with a budget is sticking to it. You’ll thank yourself once January 1st hits and you don’t have residual holiday debt to pay off,” adds Leslie H. Tayne, finance and debt expert and founder of Tayne Law Group in Melville, NY.

Shop early

By starting in November (or even earlier) you can reduce the impact of spending, so your wallet isn’t drained all at once. “

Early shopping can also help you keep an eye on sales and discounts, so you know you are getting the best deals,” explains Tayne.

Plus, it may ease stress and lighten your to-do list once December rolls around.

Avoid credit 

Use cash or debit when you can, and skip the “I’ll figure it out later” approach.

“A simple rule I like: if you can’t pay it off by January, it’s probably not worth the stress,” says Valladares.

You may want to withdraw the lump sum of cash you feel comfortable spending and put it in an envelope. Once the envelope is empty, you’re done shopping.

Prioritize essential spending 

Cut back on luxuries, such as eating out and unnecessary online shopping, during the holiday season.

“Prioritizing only essential spending during the holiday months will help free up cash to spend on gifts and entertainment,” says Tayne.

Collaborate with loved ones

Since many homeowners are in the same boat, it only makes sense to help one another.

“It can also be a good idea to set spending limits with friends and family, or to pick a Secret Santa, so you only have to buy gifts for one person in a group instead of each individual,” explains Tayne.