Shopping: Holiday Splurges in a Costly Season: Why Americans Are Prioritizing Themselves and Travel

What is the Holiday Splurges in a Costly Season Trend?

• Rising costs, rising spend: Americans expect to spend an average of $847 on holiday shopping in 2025, up 4.6% from 2024. This increase is driven more by inflationary pressures and tariffs than improved finances. It signals a cautious, calculated approach to consumption.

• Self-gifting on the rise: 6 in 10 shoppers plan to buy gifts for themselves this season, with spending on self up 20% year-over-year. This reflects a mindset of “permission spending,” where consumers reward themselves for enduring financial strain.

• Travel prioritization: Despite higher costs, travel is viewed as a high-value category, with consumers allocating more of their holiday budget to experiences over things. Travel spending is becoming an expression of resilience and joy.

Consumers are navigating holiday shopping like poker players — cautious, strategic, but willing to “go all in” for high-emotional payoff purchases.

Why is the Topic Trending: A Season of Strategic Choices

• Tariff concerns loom large: 8 in 10 Americans expect tariffs to raise prices, creating a sense of urgency around shopping decisions. This anxiety feeds into more intentional spending behavior. It also reframes the holiday season as a budgeting exercise.

• Shift toward “me first” mentality: Consumers are less shy about prioritizing themselves, even amid cost pressures. This shift is reshaping holiday marketing strategies. It highlights a cultural acceptance of self-care through consumption.

• Experiences as essentials: Travel and leisure are being elevated from luxuries to “non-negotiable” emotional investments, showing the resilience of experiential spending. It suggests that joy is seen as worth the splurge.

Overview: Holidays in the Age of Permission Spending

The 2025 holiday season is marked by higher anticipated costs, yet Americans are choosing to spend more strategically on themselves and experiences. Inflation and tariffs are creating price pressure, but consumers are granting themselves permission to prioritize small moments of joy and meaningful experiences. This points to a holiday landscape where value is measured less in volume and more in emotional return.

Detailed Findings: Key Holiday Shifts

• Average holiday budget rising: Consumers plan to spend $847 on average, a 4.6% increase over 2024, but largely due to higher costs. This illustrates the weight of inflationary forces on consumer psychology. It shows that even higher budgets don’t necessarily mean more abundance.

• Self-gifting surging: 60% plan to shop for themselves, with spend on self up 20% YoY. This reflects a broader cultural shift toward prioritizing self-care and emotional satisfaction. It also highlights consumers’ desire to find control amid uncertainty.

• Travel over things: Consumers are funneling more money toward travel, framing it as a high-value payoff despite cost increases. This indicates experiences are seen as essential to well-being. It also points to travel’s role as a post-pandemic cultural staple.

• AI as shopping companion: Shoppers are increasingly turning to AI tools to navigate deals, find inspiration, and make efficient choices. This positions AI as a trusted co-pilot in a cost-conscious season. It also shows how digital tools are reshaping consumer trust.

Key Success Factors of the Holiday Splurges in a Costly Season Trend

• Emotional resonance: Brands that tap into consumer desire for self-reward and joy will thrive. This means aligning products with emotional payoffs, not just price points. It also requires storytelling that validates permission spending.

• Travel and experience bundling: Positioning travel and experience packages as holiday essentials creates stickiness in spending patterns. This strengthens the cultural momentum of experiences. It also frames travel as part of seasonal identity.

• Tech-enabled convenience: Providing AI-driven personalization and shopping support helps consumers feel in control in a cost-heavy season. This increases trust in brands using AI responsibly. It also enhances shopping efficiency.

Key Takeaway: Permission to Indulge

Holiday spending in 2025 is less about excess and more about intentional indulgence. Consumers are prioritizing themselves and travel, despite expecting higher costs, signaling that emotional ROI has become the most important metric of value.

Core Trend: Strategic Self-Rewarding

Consumers are approaching holiday spending with cautious optimism, cutting back where necessary but going all-in on categories that deliver joy, meaning, and personal satisfaction.

Description of the Trend: Costly Joys

Holiday spending has become an exercise in balancing higher costs with emotional payoffs. Self-gifting and travel illustrate a shift toward prioritizing personal happiness and experiences, even under inflationary strain.

Key Characteristics of the Core Trend: Prioritizing What Matters Most

• Emotional ROI: Purchases are measured by their ability to deliver joy and satisfaction, not just affordability. This changes how consumers rank “value.” It also transforms indulgence into strategy.

• Permission spending: Consumers allow themselves self-gifts and indulgences, reflecting cultural acceptance of prioritizing self-care. This reframes holiday consumption as restorative. It also blurs lines between gifting and self-care.

• Experiences as investments: Travel and leisure are viewed as essential categories worth splurging on despite cost increases. This positions experiences as the new luxury baseline. It also reinforces travel’s role as a cultural marker.

Market and Cultural Signals Supporting the Trend: From Tariffs to TikTok

• Tariff anxiety: Price increases driven by tariffs influence cautious but deliberate spending. This anchors cost-consciousness as a cultural backdrop. It also motivates pre-planning.

• Generational shifts: Younger generations normalize self-gifting and indulgence, setting the tone for holiday culture. This spreads the idea of joy as necessity. It also makes indulgence aspirational.

• AI adoption: Consumers embrace AI as part of the shopping journey, normalizing tech-enabled decisions. This signals a trust shift toward digital companions. It also enhances personalization expectations.

What is Consumer Motivation: Why Shoppers Are Splurging on Themselves

• Joy as necessity: Consumers want to find moments of happiness amid financial stress. This turns indulgence into a coping mechanism. It also reframes spending as self-care.

• Control amid uncertainty: Self-gifting offers consumers a sense of agency in an unpredictable economic environment. This gives them psychological comfort. It also highlights autonomy as a motivator.

• Experiences over things: Travel and experiential spending reflect a prioritization of memories over material goods. This gives holidays deeper meaning. It also aligns spending with lifestyle aspirations.

What is Motivation Beyond the Trend: The Deeper Drivers

• Psychological resilience: Spending on self and travel reflects a desire to balance stress with joy. This frames indulgence as survival. It also positions consumption as mental health support.

• Cultural permission: Self-rewarding is no longer stigmatized; it’s culturally validated. This shift normalizes indulgence. It also integrates wellness narratives into consumption.

• Technology as trust anchor: AI tools make shoppers feel supported in their decisions, reinforcing confidence. This reshapes consumer-tech relationships. It also makes personalization indispensable.

Descriptions of Consumers: The Strategic Indulgers

• Consumer Summary: Holiday shoppers in 2025 are careful yet unapologetic, balancing cost pressures with the pursuit of joy. They seek meaning, convenience, and emotional payoffs in their purchases.

• Detailed Summary:

  • Who are they? Middle-class Americans balancing inflationary pressures with seasonal traditions.

  • What is their age? Broad range, though younger shoppers (Gen Z and Millennials) drive self-gifting.

  • What is their gender? Both men and women, with women slightly more likely to self-gift.

  • What is their income? Predominantly middle-income, though higher-income groups lean into travel splurges.

  • What is their lifestyle? Value-seeking, digitally enabled, prioritizing experiences over accumulation.

How the Trend Is Changing Consumer Behavior: Holidays Reimagined

• Selective splurging: Consumers cut back on low-priority categories to fund indulgences in self and travel. This reprioritization reshapes retail baskets. It also intensifies competition for “priority spend” categories.

• AI-powered choices: Shoppers integrate AI into their holiday routines, relying on it for guidance and deal-finding. This embeds tech in seasonal rituals. It also shifts trust dynamics.

• Normalization of self-gifting: Buying for oneself is becoming as standard as buying for others, rewriting the cultural script of holiday generosity. This evolution transforms the meaning of the season. It also creates new marketing opportunities.

Implications of the Trend Across the Ecosystem: Holiday Reboot

• For Consumers: Holiday spending becomes more intentional, rewarding, and emotionally anchored. Self-care through consumption is normalized.

• For Brands and CPGs: Brands that align with joy, travel, and personal indulgence will capture consumer loyalty in a cost-heavy season. Positioning products as emotional investments will be key.

• For Retailers: AI-powered personalization and experiential bundles will drive engagement, while clear value communication combats tariff-driven anxieties.

Strategic Forecast: Holiday Spending Futures

• Emotional positioning: Expect more campaigns centered on joy, self-care, and experiential indulgence. This will redefine seasonal messaging.

• Travel integration: Travel will increasingly be bundled into holiday spending categories, with cross-industry collaborations. This trend will embed travel into tradition.

• AI-driven loyalty: Retailers will deploy AI to offer smarter recommendations, ensuring consumers feel guided and valued. This will reshape seasonal shopping journeys.

Areas of Innovation: Joyful Spending Strategies

• Self-gifting campaigns: Marketing that normalizes indulgence as holiday tradition will expand. These campaigns will validate personal joy. They will make self-spending aspirational.

• AI-powered shopping copilots: Personalized digital assistants will become core to the shopping journey. These tools will streamline decision-making. They will build consumer trust.

• Travel-experience bundles: Retailers and travel brands will collaborate on gift + experience packages. These bundles will blend products and services. They will elevate experiences as gifts.

• Affordable indulgence products: More brands will innovate “affordable luxuries” that balance cost with emotional payoff. These products will target mass markets. They will make indulgence accessible.

• Tariff-proof strategies: Retailers will innovate pricing transparency and value framing to ease tariff anxieties. These strategies will build trust. They will stabilize spending behavior.

Summary of Trends

• Core Consumer Trend – Self First Shopping: Consumers are prioritizing themselves, with self-gifting up sharply.

• Core Social Trend – Permission Spending: Culture is normalizing indulgence as self-care in a cost-heavy season.

• Core Strategy – Emotional ROI Marketing: Brands succeed by linking products to joy, control, and resilience.

• Core Industry Trend – Experience Over Excess: Travel and memories outweigh material accumulation.

• Core Consumer Motivation – Happiness in Hardship: Shoppers seek joy and control in a season of uncertainty.

Final Thought: Holidays Rewritten by Joy

The 2025 holiday season isn’t about more gifts under the tree — it’s about meaningful ones, often for ourselves. Rising costs haven’t stopped Americans from indulging; instead, they’ve sparked a reordering of priorities where joy, travel, and self-reward lead the way. Brands that understand this balance of caution and indulgence will not only capture wallets but also hearts, redefining what the holidays mean in an era of economic strain.

Source: https://kpmg.com/us/en/media/news/americans-chose-to-spend-on-themselves-and-travel-this-holiday-season.html