Can American families still afford the Christmas they grew up with?

The short answer is no, I don’t believe families can afford Christmases from their childhood.

And my answer is not based on nostalgia or whether you even should try to afford it, but on the rising costs of things that define Christmas for us.

Each year, Americans spend more and more on gifts, on food, and on this holiday in general. And I think it is crazy, how can 50 percent of people plan to spend more than $150 on decorations alone?

While it may sound harsh, this makes me think that most people are either wealthier than portrayed or very poor at planning their budgets and managing expectations. Yet I agree that each household views Christmas in different ways. For some, it is solely a tradition, while for others, it is only a time for gift-giving.

Regardless, prices are increasing, and by being surrounded by consumerist culture, most of us give in to the discounts and maybe buy things that are not necessary. However, your spending should reflect your values, especially when talking about the increased cost of this celebration.

To understand the dramatic shift in prices, let’s look at the prices we grew up with. For 42 years, Christmas Price Index has calculated the prices of the 12 gifts from the classic song, “The Twelve Days of Christmas.” The Christmas Price Index in the U.S. stood at over $51,400 in 2025. But did you know how much it was in 1984? A few drops over $20,000.

Actually, according to the website, counting each repetition of the song, it would amount to 364 presents or over $218,000 this year. A dollar today buys only 46 percent of what it could buy back then. In 1995, $1 had the same purchasing power as approximately $2.13 today. It experienced an average inflation rate of 2.55 percent annually from 1995 to the present, resulting in a total price increase of 112.58 percent.

Here is another example of how crazy the cost of everything has grown. Remember the movie Home Alone? How many of you have already watched it this year, or maybe are planning to during Christmas? As the celebrations approach unstoppably, most of us are hit with expenses that reach sky-high numbers. However, in the movie, Christmas appears so easy, manageable, and affordable. However, it is far from the truth today, and what may have looked like a celebration every family could afford is now out of reach.

In the movies, the McCallister family has five children. InvestorsObserver has reported that when you compare basic child-rearing costs with average family income, many American families would be tens of thousands of dollars short if they wanted to raise five children. And that excludes birthdays, toys, and all the maybe not-so-necessary things to buy, but those that make the child’s life better.

In my opinion, no, not many families can afford what they grew up with. And while some could have compared themselves to the McCallisters back in 1990, today you should be part of the exclusive 1 percent. Even the house the McCallisters currently live in is worth over $5 million, with a more than 200 percent increase in the last 10 years. This does not indicate a shift in values, nor does it suggest that families should consider this a failure, rather, it highlights the economic shift we are now facing.

About Sam Bourgi
Sam Bourgi is a finance analyst and researcher at Investors Observer, bringing more than 13 years of expertise in financial markets, economics, and monetary policy. His professional background spans the private, nonprofit, and public sectors, where he has held positions such as senior policy adviser, labor market analyst, and marketing director.

About Investors Observer
Investors Observer independent financial analysis, market insights, and investment research for individuals and institutions. Founded to empower retail investors with actionable intelligence, InvestorsObserver delivers timely commentary, data-driven studies, and accessible financial tools designed to simplify complex market trends.

Sam Bourgi, Special to LassenNews.com