Seasonal squeeze: anticipated holiday spending clashes with long-term savings goals, especially for younger generations

New Bread Financial study reveals Gen Z leads holiday spending, with 37% expecting to rely on financing to cover festive purchases

COLUMBUS, Ohio – October 1, 2025 – Bread Financial® (NYSE: BFH), a tech-forward financial services company that provides simple, personalized payment, lending and saving solutions, today released findings from a national study¹ that explores how U.S. consumers are preparing to spend and save this holiday season and beyond. While 20% of consumers list paying down debt as their top savings priority, 24% still expect to borrow to cover holiday expenses.

Forty-eight percent of respondents report high cost of living as their biggest financial hurdle. To adjust for inflation, nearly 1 in 5 Gen Z respondents (19%) report increasing their holiday budget by at least 25%, compared to just 4% of Boomers. Almost half of Boomers (43%) are not preparing to save for holiday spending at all, while 37% of Gen Z plan to rely on financing to cover costs. Holiday travel also emerges as a dividing line, as nearly a third of Gen Z (32%) are saving for it, compared to only 12% of Boomers.

Gen Z: slaying & paying
More than four in ten Gen Z consumers (42%) are saving for festive outfits this holiday season, the highest of all generations. Gen Z also leads in saving for decorations (22%) and cards (21%). But holiday cheer comes at a cost, with 21% of Gen Z expecting to spend beyond their means and rack up $500–$999 in debt.

‘Tis the season of trade-offs: what consumers will—and won’t—give up
To afford holiday expenses in particular, many consumers plan to cut back on everyday indulgences. Dining out and shopping for nonessentials are the first to go, with 43% overall and nearly half of Millennials (48%) planning to reduce restaurant visits. Gen Z stands out as the generation most likely to cut subscriptions, with 34% reporting they will drop streaming services. Meanwhile, 20% of consumers—led by 30% of Boomers—say they won’t sacrifice any daily expenses to cover holiday costs.

From holiday shopping to long-term planning
Overall, Millennials are the most savings-active group, with 64% maintaining one to three accounts (traditional savings accounts, certificates of deposit, retirement plan accounts, or others). Gen Z is leading in digital adoption, with 37% using apps to track savings, nearly four times the rate of Boomers (10%). Retirement confidence also leans younger, as 33% of Millennials and 31% of Gen Z say they feel “very confident” in their planning, compared to only 21% of Boomers—despite most being the generation at or beyond traditional retirement age. 

The ‘treat culture’ dilemma
Throughout the year, one in four Gen Z respondents (24%) admit they “treat themselves too much,” and nearly one in six (17%) say they’ve made emotionally driven purchases in the past six months. Millennials are no exception, with 23% struggling most to resist impulse buys, highlighting how younger consumers often trade discipline for experience-driven splurges. On the contrary, 70% of Boomers say their overall savings strategy is to cut unnecessary expenses. 

Navigating financial pressures and priorities year-round 
The data also highlights the competing pressures shaping consumers’ financial decisions, from day-to-day challenges to big-picture savings. Inflation weighs heaviest on Boomers (53%), while income instability is most prevalent among Gen Z (25%). Paying off debt is the top savings goal for one in five consumers (20%), followed by retirement, major purchases and emergency funds, tied at 14% each. Generational pride points also differ, with Boomers most proud of being debt-free (36%) and nearly one in five Gen Z respondents (19%) highlighting ‘building generational wealth’ as their strongest savings habit. 

“Generational differences in how consumers prepare for big expenses like the holidays reveal deeper truths about how they approach financial planning holistically,” said Jessica Calaway, Senior Manager, Thought Leadership & Consumer Insights at Bread Financial. “Our data shows younger consumers are more comfortable with digital tools and financing to achieve their goals, while older generations lean on traditional savings and debt avoidance. These insights help us design products that meet consumers where they are, while empowering them to reach their long-term savings goals.”