In a year when many households are already stretched thin, this moderate bump could make holiday budgeting harder. This year, families will see the sharpest increases in hosting and entertainment costs. Luckily, travel and decorations remain stable. With a little intentional planning, you can enjoy the holiday season without breaking the bank.

Hosting a wallet-friendly holiday bash

No matter what holiday you celebrate, a family dinner is likely a treasured tradition. This year, the cost of hosting a dinner for twelve people rose 5.3%. The average family will spend $362.80 on food, drinks, and desserts. This price tag may seem daunting, but there are easy tricks to bring it down.

Interestingly, food prices dipped 2.4% this year, so your main course shouldn’t be a roadblock. The cost of prepared desserts rose 3.8%, and drinks jumped 19.2%. If you plan to serve wine, beer, or coffee, you may want to buy strategically or consider alternatives.

For an extended family dinner, you can manage costs by assigning mains, sides, desserts, and drinks to different groups. A potluck setup will save the host money, and it allows everyone to contribute something great to the table. Instead of buying prepared desserts, you can pull out an old family recipe to make something special. Get everyone involved, and embrace a DIY mindset. Soon, you might find that you’ve established a new family tradition.

Creative decorating strategies

Here’s some good news from our research: decorating costs have stayed consistent since last year. A family of four buying all new decorations will spend, on average, $460.03. If you reuse decor, as most families do, your decorating cost will drop even lower.

To make the old feel new, consider refreshing what you already own. If you’re crafty, you can customize small details, like ribbons on candles or wreaths. If you’re spending on outdoor decor, you can rest easy knowing that lower electricity prices will offset the increased cost of lighting. Decorating can be a great way to make your home space feel festive, and with a little creativity, it’s possible to do at any price point.

Giving thoughtfully

The average family of four is spending $495 on gifts, wrapping, and charitable donations this year - a 2.8% increase from 2024. The biggest jump comes from children’s toys and shipping.

Many families take a creative approach with gifting. Some will deemphasize physical gifts in favor of family gatherings and fun activities. Families comprised mainly of working adults can try a Pollyanna approach, where everyone buys one gift for someone else.

If you’re planning to mail gifts or holiday cards, you can save by ordering early. Avoid premium shipping fees. Last-minute charges can add up fast, and you want to make sure family members get their presents on time.

Purposeful travel and entertainment

If you plan to travel for the holidays, there’s some luck: transportation costs have remained relatively steady. The cost of an average train ticket between East Coast cities rose just 0.7%, and gas prices actually fell 1.3%. That’s a small relief for road-tripping families.

Holiday activities, however, are getting more expensive. Our data shows a 9.4% increase since 2024, with price hikes for popular activities like light shows or ice skating. A night out for a family of four can now top $450, without accounting for travel or food.

Saving on travel and entertainment requires planning ahead. Use digital tools, like low fare alerts and credit card reward points, to offset your travel expenses. When driving, coordinate carpools with friends heading in the same direction. If you have the budget to spare, it’s a good idea to plan just one “splurge” activity. Then, you can save money by attending local fairs or practicing simple traditions, like baking cookies or watching classic movies.

Make the season shine

In 2025, the average holiday budget rose to just under $3,000. That’s a daunting number, but there are many ways to stay festive without overspending. Start with a simple holiday budget that covers the major categories, like hosting, travel, gifts, activities, and decor. Track your spending weekly, and get creative about having fun.

After all, the holidays are not about spending big. They’re about connecting with loved ones and celebrating a year well-lived.

For more on Affinity's Holiday Spending Index, visit here!

This information is for informational purposes only, is intended to provide general guidance, and does not constitute legal, tax, or financial advice. Each person's circumstances differ and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and legal counsel to discuss your particular needs before making any financial or other commitments regarding the matters related to your condition.