Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors’ opinions or evaluations.
This holiday season, the best gift you may be able to give a member of Generation-Z is grace, especially if your love language is receiving gifts.
A new PwC report found that Gen-Z is tightening their purse strings in the face of rising cost of living and tariffs, with many re-budgeting their priorities. But that doesn’t mean the Gen-Zer in your life won’t get you a thoughtful gift; it just probably won’t be a Fendi bag.
It’s the Thought That Counts
PwC’s 2025 Holiday Outlook survey found that, across the board, consumers were practicing more austerity when it comes to holiday shopping, with spending declining an average of 5% from 2024—the first significant drop since 2020.
Gen-Z respondents, ages 17 to 28, skewed more heavily towards frugality than other generations, with 23% saying they expect to slash their holiday budgets when the survey took place in June. PwC notes that their findings “reflect sentiment[s] captured in June, at a time where there was more uncertainty around tariffs, which have since been delayed or paused (and therefore might not have as great an impact on survey respondents’ estimated spending).”
PwC surveyed 4,000 consumers in the U.S. between June 26 and July 9, 2025, with 1,000 respondents each from Gen-Z, Millennials, Gen-X and Baby Boomers. The sample was balanced across gender, region or state, and generational groups representative of the U.S. population.
While budgeting is overwhelmingly top of mind for all respondents (84% anticipated cutting back in general through the end of the year), the biggest category that participants will adjust is gift spending, down 11% to an average of $721. In comparison, consumers spent an average of $814 in 2024.
Despite Gen-Z’s intent to cut back on spending, there’s a notable interest in the categories of sustainability and wellness for gifts they will purchase. Nearly two-thirds of those surveyed (63%) intend to purchase upcycled products, and one-third of respondents noted that cuts in their budget reflect a desire to limit overconsumption.
According to a 2023 Eventbrite report, the generational divide is clear, as 78% of Gen-Z and Millennials say they’d rather pay more for a meaningful event or experience as opposed to material items, compared to 21% of Baby Boomers.
Unsurprisingly, many Gen-Zers plan to optimize their holiday shopping during Black Friday and Cyber Monday sales, with about 38% looking to squeeze all holiday purchases between November 27 and December 1. For brands, this means that nearly 80% of holiday budgets will be spent by the end of Cyber Monday.
It’s a Marathon, Not a Sprint
For a generation deeply invested in sentimental gifts, Gen-Zers should start sooner rather than later. Having a budgeting plan can help you stretch your spending allowance and make sure you have a pool to dip into once holiday sales start.
Budgeting Apps
Determining how much money you spend on a regular basis with budgeting apps can help you set spending goals across categories, or buckets, and put aside excess income.
High-Yield Savings Accounts
Once you have an idea of where your money is going and areas where you can cut down, a good move would be to start saving holiday shopping funds in a high-yield savings account (HYSA). A HYSA offers interest yields that are higher than the national average and help you earn extra money to put toward gifts, rather than have funds sitting stagnant in other accounts.
Most HYSAs allow accountholders to remove funds as they please with no penalty, and many require no monthly minimums or fees, such as Synchrony Bank. Keep in mind that certain accounts may impose monthly withdrawal limits, so be sure to read the terms carefully.
With a holiday fund in your back pocket it frees up brainpower that would stress over finances to instead brainstorm gifts that stun and dazzle.
Bottom Line
Having a smaller holiday gift budget doesn’t mean that quality has to sink. Gen-Z’s focus on intentional and sentimental shopping means that starting early and saving for gifts can play a big role.
Consider opening a HYSA to allocate a holiday shopping fund and start thinking about knick-knacks that will soothe the spirit and won’t break the bank.