Holiday Inflation: How to Save Money This Season

With inflation on the rise, people are seeking new ways to fight increased costs this holiday season. This year, Thanksgiving dinner cost consumers 20% more than last year, according to data from the American Farm Bureau Federation. After a Thanksgiving marked by higher prices, this holiday season will likely continue to cost more for consumers.

The Consumer Price Index increased 0.1% since October and 7.1% over the past 12 months, according to the U.S. Bureau of Labor Statistics’ November data.

With price increases across all areas, consumers are struggling to pay for seasonal costs.

“Forty-three percent of consumers say they don’t earn enough to cover the costs of gifts and other holiday items this year,” the National Retail Federation reported.

Amid ongoing inflation, many are trying to come up with practical solutions to save money. Here are six ways people are saving this holiday season.

1. Skipping the Tree

One big holiday staple for those who celebrate Christmas has been impacted by inflation: the Christmas tree.

Ahead of the 2022 holiday season, the Real Christmas Tree Board conducted a survey of 55 Christmas tree growers. The group, which is devoted to the research and promotion of real trees and overseen by the U.S. Department of Agriculture, found that 71% of growers expected the price of their trees to increase 5% to 15% from last year. Less than 2% of growers did not expect an increase in price, according to the survey.

Christmas tree growers’ highest concerns regarding sales this season were supply chain issues, followed by inflation’s influence on consumers, according to the survey.

UWM student Victoria Hernandez has increased her shifts at the hospital to afford gifts this year.

“I’m working 72 hours a week now so that I can afford paying rent and getting Christmas presents,” Hernandez said.

Hernandez said she and her family had to reevaluate whether to purchase a Christmas tree this holiday season.

“We didn’t even want to buy a tree this year just because they’re like $100, and we’re like, we can’t really spend that right now,” Hernandez said.

2. Less is More

One approach that UWM student Sasha Gesner has taken to save money this season is, “not getting people gifts.”

“Less people; only immediate family and friends,” Gesner said.

Gesner is not alone in this strategy. By shortening their list of gift recipients this year, people are saving money while still showing care for those closest to them.

In addition to giving gifts to fewer people, some shoppers are giving less gifts overall this holiday season, opting for one gift, on a budget, rather than spending on numerous smaller gifts for those on their list.

3. Prioritizing Travel

The price of gas and airfare has left many deciding whether or not travel is necessary. The average domestic itinerary fare for a flight from Milwaukee was $401.85 in the second quarter of 2022, according to data from the Bureau of Transportation Statistics. The national average for this period was $397.14, according to the data.

While Gesner plans to return home to Arizona for Christmas, she had to decide during which holiday she wished to visit.

“For Thanksgiving, I ended up not going home,” Gesner said. “So, I stayed here in the Midwest for Thanksgiving break because of the flights. I didn’t get to see my family.”

Similarly, Hernandez said she used to visit family in Texas every other year, but even after two years apart, the cost of traveling is keeping her from visiting again this year.

“I notice that I’m more conscientious with my choices, especially with what I choose to pay for and what I don’t pay for,” Hernandez said. “That’s something my mom tells me: ‘Is it a want, or is it a need?’ So, we’ve had to change Christmas plans because of it.”

4. Giving Gifts with Personal Meaning

This year, some individuals are deciding to craft to save money, gifting handmade presents and picking out any store-bought elements with care.

“I’m going to go to second-hand stores, like thrifting, or even doing DIY creative stuff to see if I can give presents, so I don’t have to spend almost $100 per person,” Hernandez said.

She said she hopes to give gifts with more personal meaning to those on her list this year.

“I wanted to get small trinkets, or something small that’s personal, rather than get them like four or five,” Hernandez said.

5. Shopping the Sales

This year, 58% of holiday shoppers reported that sales and promotions matter more to them when shopping this season than in 2021, according a survey conducted by the National Retail Federation this fall.

Aside from taking advantage of discounts and loyalty programs offered by stores, many have begun shopping earlier in the year. Due to inflation fears and the pattern of sales this year, 81% of consumers chose to shop in the month of November, 42% of those consumers citing rising prices as their reason for shopping early and 39% saying the deals would not improve later, according to the National Retail Federation.

Hernandez said she went Black Friday shopping at Mayfair after her shift at work but has been disappointed by the cost of gifts this year and lack of significant savings.

“All my co-workers already have their Christmas gifts planned, and when I went to the mall to look at presents, or to even get stuff, the average cost now is like $30,” Hernandez said.

6. The Gift of Quality Time

Some people have chosen to forgo the exchange of gifts altogether this year and spend their holiday budget elsewhere. One such example is those who have chosen to take a trip this holiday season or save for a future excursion, hoping to make memories with their family instead of giving and receiving presents.

Others have opted not to spend at all, setting aside their usual holiday shopping budget for savings and instead sharing the gift of time with friends and family.

“I feel like just spending time with people or just seeing people again is kind of nice,” Hernandez said. “So that’s my advice: don’t stress too much about money, even though it’s getting a lot tighter now.”