Why 2026 Holiday Gifts Cost More and How to Cope

Holiday shopping costs more this year, and many Americans are cutting their gift budgets to keep up. Tariffs may be part of the reason.

More than two-thirds of Americans (about 68%) who answered Thrivent’s 2026 Holiday Spending Survey plan to cut back on at least one holiday expense this year. Around 72% of the survey’s participants said inflation was hurting their household finances heading into the holiday season. Gifts for family and friends rank second on the cut list, behind dining out. Among people trimming gifts, 66% plan to buy fewer and 51% plan to buy cheaper ones.

Thrivent Financial Advisor Alexander Newby says rising costs are forcing tough calls this year.

“The holidays can bring pressure to show people we care through spending, but higher everyday costs are forcing many families to make difficult choices about what they can realistically afford.”

– Thrivent Financial Advisor Alexander Newby

Why holiday gift prices may be higher

A tariff is a tax on goods brought into the U.S. from other countries. The company importing the goods pays it, and shoppers can sometimes end up covering that cost through higher prices.

In the survey’s full results, 58% of participants said tariffs were hurting their household finances, and 67% of them expected tariffs to make the holidays more expensive. Higher prices on imported goods may have contributed to the gift cuts, though the survey doesn’t prove it.

Presents related to hobbies like sports gear, art supplies, and musical instruments are mostly made abroad, largely in China. The Peterson Institute for International Economics tracked how much of these gifts’ import value went to tariffs. That share jumped between the 2024 and 2025 holiday seasons. For sports equipment, pencils and crayons, and instruments, rates rose from about 5% or 6% to between 21% and 28%. For video game consoles, tariff shares went from zero to 19.7%.

In February 2026, the Supreme Court struck down some tariffs. From January through August 2026, the tariff share on those hobby-related goods averaged between 14% and 17%. Store prices don’t reflect the lower tariffs . Many sellers spent 2025 selling stock imported before the tariffs, so 2026 prices reflect last year’s higher rates. Prices also tend to rise fast and fall slowly. Musical instrument prices, for example, have risen 9.1% over the past two years, while core goods prices, which leave out food and energy, rose 2.3%.

What higher holiday gift prices mean for your budget

A smart holiday plan starts with two questions: What can you afford, and what matters most to you? These six steps can help you keep giving without breaking your budget.

Cover the must-pays first. Before you shop, review your expenses and any debt. Rent, bills, and debt payments come first, and your gift limit is what’s left.

• Set your limit using today’s prices. Base it on what you can afford now. Last year’s total may not stretch as far at this year’s prices.
• Shorten the list. Decide who matters most this year. In the survey, 46% of people cutting gifts plan to shop for fewer people.
• Set limits on gift exchanges. A family or office swap with a spending cap can mean buying one gift for one person.
• Give something you make or do. A handmade gift or an act of service, like a home-cooked meal or a night of babysitting, can mean as much as something from a store.
• Keep a running total. If spending starts to creep past your plan, adjust before you turn to a credit card.

Sources: Thrivent, Peterson Institute for International Economics

Think of us as your money-savvy best friend, not your financial adviser. This story is for information and fun, not personal advice, so talk to a licensed professional before you make any big money moves.