Is Giftflation Blowing Up Your Holiday Budget? Here’s How to Fight It.

Think about all of the people on your holiday gift list. Now, think about how much all those gifts are going to cost you. Are you starting to sweat a little bit?

If gift shopping feels like a bigger financial burden this year, you’re not alone.

A recent NerdWallet survey finds that holiday shoppers plan to spend $182 more than last year on presents, on average.

Chalk it up to “giftflation.”

What is giftflation?

“Giftflation” refers to the rising cost of gift giving, fueled by inflation and the growing pressure to give.

Why gift givers are feeling extra strain

Shoppers are getting a strong dose of sticker shock this year.

Sweeping tariffs have hit popular gift categories, such as apparel, household goods and appliances. It’s no surprise that many holiday shoppers (74%) expect tariffs to impact their holiday shopping, according to the NerdWallet survey.

It’s not just gifts that are getting more expensive. Inflation is also driving up the price of food, energy, transportation and other essentials, according to data from the Bureau of Labor Statistics.

“When everyday costs rise, that leaves less room for discretionary spending when it comes to gift giving,” says Hillary Stalker, a certified financial planner in Franklin, Tennessee.

Surging costs come at a time when many households are coping with income disruptions from layoffs and the government shutdown. Shoppers may lean more heavily on payment methods like credit cards and buy now, pay later plans, which could lead to overspending.

Taylor Nelsen — an accredited financial counselor in Greenville, North Carolina — says the high earners she works with are feeling the squeeze, too.

“They're making money, but they are just pressed in a lot of other areas right now,” she says.

Many high earners have bought their first homes in the last few years, she says, and are concerned with managing other expenses alongside steep housing costs.

Social pressures are mounting, too.

A lot of high earners are entering a stage of life where they feel expected to give gifts to more people, like their kids’ teachers, Nelsen says. And when it comes to showing gratitude to the people in our lives, we often set the bar too high.

We may feel guilty if we receive an expensive gift and don’t reciprocate — says Lynn McHann, an accredited financial counselor in Bozeman, Montana.

It’s hard to shake the feeling that we’re falling short.

Stalker says the rise of social media and influencer culture has intensified the pressure to buy more expensive and extravagant gifts.

What used to be “keeping up with the Joneses” now feels more like "keeping up with the Kardashians,” she says.

How to fight giftflation

You can keep the holiday magic alive without going overboard on gifts. These strategies might help:

Take a good, hard look at your cash flow

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If you don’t already have a holiday budget, make one now. Check on how much money you have coming in and going out. Then, choose a spending limit that works for you.

If you’re feeling strapped this year, start thinking about a savings plan for next year. Put a little bit of money away for holiday spending each month throughout the year so that it's not such a crush to your budget during a one or two-month period, McHann says.

Reset expectations

Take a step back and evaluate the relationships you have with the people you feel obligated to give gifts, Nelsen says.

“Do they even want a gift?” she says.

Talk to your adult family members about what they value. You could do something more meaningful than a wrapped present, like swapping childcare, Nelsen suggests.

Don’t hesitate to set boundaries. Let loved ones know if you need to scale back or sit out the gift exchange.

Be honest about the financial or emotional challenges you may be facing right now. Friends and family may assume you’re doing just fine financially. They might not know about the busted water heater you just replaced, or that your homeowners insurance premium is about to go up.

These discussions can be difficult, but they’re necessary to protect yourself. Stalker recommends having these conversations with your kids, too, to help set the tone.

Stick with a simple explanation, like, “This year things are going to be a little tighter than they've been in the past,” or, “Please give me your list. Just know that Santa can't bring all of these things,” she says.

Pause before you buy

Taking advantage of Black Friday and other holiday deals can help offset inflation. But don’t let flashy advertisements and the fear of missing out on online sales lure you into buying more than you planned.

McHann suggests waiting 24 hours before going through with an unplanned purchase. “If after 24 hours you're still feeling the joy about giving that gift and it doesn't cause you anxiety, then go forward with that purchase,” she says.

If it’s too hard for you to scroll through social media without feeling the urge to shop, give yourself permission to log off.

“It's also perfectly OK to take a step back from being on social media through the holidays,” Stalker says.

Taking a break will help you avoid impulsively buying things through influencer links or envying what other people have.

Get creative

Look for affordable ways to give, such as thrifting your holiday gifts, planning a coffee date or making something by hand.

Stalker says her favorite gifts this year are the painted coffee mugs her kids made for Mother’s Day.

“And surely, they did not cost anywhere near the price tag of a designer handbag,” she says.

The article Is Giftflation Blowing Up Your Holiday Budget? Here’s How to Fight It. originally appeared on NerdWallet.