The Midterms and You: How the Results Could Shake Up Your Holiday Budget
With inflated prices and the high cost of living putting pressure on household budgets, Americans are tightening their belts. So what does that mean for the holiday season?
Despite the financial strains, Bain & Company projects that U.S. holiday retail sales will surpass $1 trillion for the first time in 2026. However, holidays aren’t the only thing on consumers’ minds.
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It’s an election year, and midterms are coming up on Nov. 3, leaving many wondering what policy changes could affect the cost of gifts, groceries and holiday travel. Here’s what to know, according to experts.
Don’t Expect Much Change
Many Americans are getting a jump-start on holiday shopping and taking advantage of early deals, as Amazon’s October Prime Big Deal Days illustrates. The sales event helped drive $9.86 billion in U.S. online spending across retailers, according to Vivek Pandya, Director for Adobe Digital Insights, who spoke to Schwab Network. With that in mind, shoppers shouldn’t expect the midterm elections to bring immediate relief this holiday season.
“The impact of the election on this year’s holiday shopping season will be limited,” said Paul Stanley, Senior Economist at Numerator. Potential changes to tariffs, taxes and federal benefit programs could affect household budgets over time, influencing how much consumers have left for holiday gifts, groceries and travel. But many of those changes are dependent on future policy decisions, and shoppers shouldn’t count on immediate savings this season.
Today’s Economy Matters More than the Election
Most of this holiday season’s costs will be driven by economic conditions already in place, such as rising oil and diesel prices, which escalate shipping, travel and grocery prices.
But there are more concerns that are causing stress for households ahead of midterms.
“Higher borrowing costs add to the pressure, since the Fed hiked rates [per CNBC] by 25 basis points in September, and households have less cushion to absorb it, with the personal savings rate down to a four-year low at 4.1% in August,” [per Bureau of Economic Analysis] said Stanley. “While many forecasts show strong growth for 2026 holiday spend, part of that growth reflects higher prices rather than higher volume.”
That can mean making difficult choices about where people spend their money.
John Tamny, editor of RealClearMarkets and author of The Deficit Delusion, emphasized that trade-offs are central to economics.
“If you purchase the more expensive car after the mindless implementation of tariffs, you logically have fewer dollars to purchase travel, food and clothing,” he said.
Don’t Let Midterms Dictate Your Holiday Plans
For consumers worried about holiday costs, Eric Mangold, CWS, founder of Argosy Wealth Management, suggests reviewing past spending to identify areas to cut back on and watch what you’re spending.
“Are you buying three of an item when two will do?” he asked. “Or have you upgraded something that really didn’t need it this year?”
He also advises households to prioritize emergency savings, ideally keeping three to six months’ worth of expenses set aside.
Finally, when it comes to the midterm elections, Mangold cautions against making holiday plans around potential policy changes that may not materialize right away.
“I rarely recommend changing your life because of an election,” he said. “Changing your holiday plans based upon the midterm elections is a bit drastic.”
Bottom Line
The midterm elections are unlikely to change holiday costs overnight, but policy decisions made in 2027 could affect how much people pay for food, travel and imported items in the months ahead. For now, consumers can focus on keeping finances in order and prioritizing savings.
Editor’s note on political coverage: MoneyLion is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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