The Struggle Behind the Season: Americans’ Financial Challenges During the Holidays

As the holiday season approaches, a stark reality is emerging for many Americans who are finding themselves caught between traditional expectations of festive generosity and the harsh economic pressures of today’s economy. Recent research by MoneyLion, which surveyed 1,000 nationally representative adults, has revealed troubling insights into how people are managing to afford Christmas this year. An overwhelming 84% of shoppers plan to rely on credit cards to cover their holiday expenses, a telling indicator of financial strain as costs continue to rise across the board. This dependency on credit isn’t the only concerning trend – 30% of respondents intend to use buy-now, pay-later services like Klarna and Afterpay, while 14% expect to take out personal loans simply to purchase gifts for loved ones. These statistics paint a picture of a population stretched thin, willing to take on debt to maintain holiday traditions despite the potential long-term consequences to their financial health.

The economic pressure is forcing many Americans to take extraordinary measures to afford the season. A quarter of all respondents indicated they plan to take on additional employment just to cover holiday expenses, with younger generations feeling this pressure most acutely – 44% of Gen Z and 34% of millennials reported plans to work extra jobs. This hustle culture approach to affording celebrations speaks volumes about the disconnect between wage growth and the rising cost of living. Millennials appear to be particularly affected by economic challenges, with 35% admitting they’ve returned gifts they received to help cover essential living expenses like rent and food. This generation, many of whom have experienced multiple economic downturns during their prime earning years, continues to face significant financial obstacles that now extend into their ability to participate in traditional gift-giving customs without compromising their basic needs.

The economic strain revealed in the MoneyLion survey aligns with findings from Talker Research, which discovered that nearly one-fifth of Americans have made the difficult decision to reduce their grocery budgets to free up money for holiday gifts. This troubling trade-off between food and presents highlights the emotional complexity of the season, where many feel socially obligated to give gifts despite personal financial hardship. The pressure to maintain appearances and fulfill cultural expectations around Christmas can lead to difficult choices that may have implications well beyond the holiday season, especially when those choices involve nutritional sacrifices or accumulating debt that will follow consumers into the new year. The psychological weight of trying to create a “normal” holiday experience while struggling financially adds another layer of stress to what should be a joyful time.

What makes this economic situation particularly complex is the widening gap between different income brackets in America. While many are struggling, CNN reports that high-income earners are actually spending more than ever, creating a misleading image of overall economic health. This disparity masks the increasingly painful reality faced by a growing segment of the population. As Joe Wadford, senior economist at Bank of America Institute, aptly told CNN, “Low-income and high-income households are often living in two different worlds – and experiencing two different economies.” This divide has profound implications not just for holiday spending, but for how economic policies are crafted and how recovery is measured. When aggregate spending figures look robust due to increased expenditure from the wealthy, it becomes easier to overlook the financial struggles of middle and lower-income Americans who make up the majority of the population.

The holiday season has traditionally been a time when Americans demonstrate their prosperity and generosity through gift-giving and celebration. However, the current economic landscape is forcing many to reconsider these customs or find creative ways to maintain them despite financial constraints. Some are turning to homemade gifts, secret Santa exchanges that limit the number of presents needed, or simply having frank conversations with loved ones about scaling back expectations. Others are prioritizing experiences over material items, finding ways to create meaningful holiday memories that don’t carry hefty price tags. Yet many still feel trapped by societal expectations, especially parents who may go to great lengths – including taking on debt – to ensure their children don’t feel the impact of financial struggles during what’s marketed as the most magical time of year.

As Americans navigate these challenging economic waters during the holiday season, the data reveals more than just spending habits – it illuminates fundamental questions about values, priorities, and the sustainability of current economic systems. The widespread reliance on credit and payment extensions suggests a precarious situation where many are just one unexpected expense away from serious financial trouble. The willingness to work multiple jobs or make sacrifices in essential areas like nutrition indicates a population determined to maintain social connections and traditions despite increasing difficulty. As we move forward, both individually and collectively, there may be an opportunity to reassess what truly matters during the holidays and how to celebrate in ways that bring joy without financial burden. Perhaps the greatest gift this season could be a shift toward celebrations that honor our connections to each other without demanding financial sacrifices that echo long after the decorations have been packed away.