Rachel Burris4-Minute Read
UPDATED: May 31, 2023
It’s no secret that Americans get fired up about the holidays. It’s not even Thanksgiving yet and already Christmas songs are pervading the airwaves, retailers are touting their holiday sales and children are penning their wish lists. Some home owners are also thinking about how to stage their home for the holidays to lure potential buyers.
Although you can't put a price tag on our holiday celebrations, there are significant costs involved in creating our holiday cheer. According to data provided by the National Retail Federation, holiday spending has increased by 45% over the last decade. Over the course of the 2019 holiday season, the U.S. spent $729.1 billion.
That number may be astounding, but it gives little insight into what holiday spending looks like on an individual level. To get a better sense of how much the average person spends to get into the holiday spirit, we conducted a survey that asked Americans to reveal their annual expenses and habits. How much do you think Americans spend on holiday decorations?
To determine how much people typically spend on holiday decorations each year, we surveyed 2,064 Americans sourced through an online panel. The sample was controlled to include a relatively equal number of participants in each of the following age ranges: 22 – 45 (695), 46 – 65 (671) and 65+ (728). The sample was further controlled to represent the nation’s demographics, regarding gender and region, as reflected in the Census.
Based on our findings, the average person in the United States spends approximately $269 on decorations each year — and around $549 on gifts for family and friends. When asked how they feel about the amount of money they spend, the majority of participants described their holiday spending as worthwhile. Many even said that they wish they could afford to pay for more.
As one participant said, “I wish I could spend more and completely indulge in the Christmas season because it’s such a magical and family-oriented time.”
These words were echoed by hundreds of other subjects, who seemed to be swept into the holiday spirit as they discussed their spending. For them, decorating for the holidays appears to be altruistic: a way to unite families and even create a more inclusive neighborhood.
“Most of my neighbors are from out of the region. They don’t really know too many people in the area, so I think that seeing the decorations makes them feel a little bit more accepted in the area,” said another participant.
Although the majority of individuals (43%) spend around $100 on decorations each year, nearly 15% spend upward of $500. To get a clearer picture of why some Americans spend so much more than others, we examined how holiday decoration spending varies by population. While there was no significant difference in spending across different regions of the United States, there were distinctions among other subgroups.
As one would expect, there's a high correlation between holiday spending and annual gross income. The more Americans earn each year, the more they typically spend on decorations. The highest wage earners shell out approximately $384 on average each holiday season.
“If I have the extra money after paying usual household expenses, I use it towards holiday decorations and gifts,” said one participant, who earns under $50k a year.
Relationship status also has a strong bearing on holiday spending. Individuals in committed relationships spend more than those who are single. Yet, it’s the parents who spend the most. People who are married with children invest an average of $390 on decorations every year.
One parent explained, “I think it’s important to make memories for my kids, and Christmas is a huge one. Decorating makes it special.”
There is actually a negative correlation between decoration spending and age. The younger you are, the more you spend, regardless of how much money you earn annually. Based on participants’ explanations, it appears that older individuals spend under $200 on average because they already have amassed a wealth of decorations over the years.
“I rarely buy decorations – I am old enough that I have plenty – just recycle what I have,” said one 71-year-old participant.
Participants’ holiday budgets cover a range of decorations, many of which are used to achieve a traditional holiday decor style. The most common holiday decorations said to be purchased each year were tree lights (57%) and smaller home adornments, like ornaments, tinsel and ribbon (56%).
According to the survey, 51% of all participants said they purchase Christmas trees each year. However, that number drops to under 30% when looking at individuals who spend less than $100 on decorations. It’s no wonder. Based on a survey conducted by the National Christmas Tree Association, the median price of real Christmas trees purchased in 2019 was approximately $77.
When it comes to outdoor decorations, 63% of individuals put holiday lights up on their house or in their front yard. This number vacillates significantly based on the amount of money they spend on decorations annually. For those who spend under $100 on decorations each year, only 39% hang lights. Meanwhile, 92% of individuals who spend over $750 on decorations add them to the exterior of their property.
These numbers make sense when you consider the cost of installing holiday lights. According to Home Depot, the installation of a minimal display on an average sized house can cost $100 – $300, a number that can increase to well over $1,000 for larger properties or more complex lighting designs.
The majority of participants polled say they put up their holiday decorations right after Thanksgiving (63%) and take them down in January (66%). Meaning, the average American spends $269 for something they enjoy for just over a month.
However, even those who recognize the extravagance demonstrate that holiday decorations are a positive example of how money can, in fact, buy happiness. “I know decorations are not really a necessary expense, but they really help us feel festive and happy,” said one participant.
Decorations are seen as more than a way to beautify one’s home. For the vast majority of Americans, decorations are about upholding traditions, bonding with the family and bringing cheer to the neighborhood. The high cost is a small expense, considering what it buys. As another participant explains, “I feel I only do it once a year, and the smiles on my family’s faces make it well worth it.”
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