Personal Finance
Americans to spend $14.6 billion on Valentine’s Day, report finds
Sanja Radin | E+ | Getty Images
It seems that love is in the air — and so is the spending as more people are apparently getting into the Valentine’s Day spirit this year.
Americans shopping for their significant others are expected to spend $14.6 billion this year, according to the latest annual survey by the National Retail Federation and Prosper Insights & Analytics. That is up from $14.2 billion in 2024.
The survey polled 8,020 adult consumers about their Valentine’s Day shopping plans in early January.
Despite strong spending trends, inflation could play a role in whether consumers choose to splurge or scale back, experts say. To that point, this record Valentine’s Day spending comes at a time when inflation is still relatively high in the U.S. The consumer price index, an inflation gauge, jumped 3% for the 12 months ending in January, according to the Bureau of Labor Statistics.
The January reading is up from 2.9% in December, the fourth consecutive month of increases in the annual inflation rate when it was at 2.4% in September.
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While consumers may not feel great about the broader economy, “they still feel very willing to spend on what’s important to them,” said Katherine Cullen, vice president of industry and consumer insights at the National Retail Federation.
“These moments of celebration throughout the year have really seemingly grown in the consumer psyche,” or “becoming moments of joy,” she said.
“We’ve also seen people more likely than before the pandemic to say that they’re really living in the moment because the future is a little more uncertain,” Cullen added.
It can be a nice experience to splurge on the holiday. But if you find yourself with a tighter budget this year, there are financially savvy ways you can express your love, experts say.
How Americans are spending for Valentine’s Day
The National Retail Federation found that candy was the most popular Valentine’s gift. More than half, or 56%, of surveyed respondents plan to give candy, followed by flowers and greeting cards equally at 40%, an evening out at 35% and jewelry at 22%.
According to the NRF report, shoppers plan to spend approximately $6.5 billion on jewelry, with further spending allocated towards “an evening out” at $5.4 billion and flowers at $2.9 billion.
As you browse online or hit the stores for Valentine’s Day shopping, it can be tempting to put the purchases on your credit card. Before you do, keep in mind that Americans’ total credit card balance is $1.211 trillion as of the fourth quarter of 2024, according to the latest consumer debt data from the Federal Reserve Bank of New York. That’s up from $1.166 trillion in the third quarter of 2024 and is the highest balance since the New York Fed began tracking in 1999.
If you can’t afford to make these purchases, here are ways to celebrate the holiday without going over budget, according to experts:
1. ‘Shift your Valentine’s Day’
If you can’t make dinner or evening plans on Valentine’s Day this year, consider celebrating the holiday on a different date, experts say.
“Shift your Valentine’s Day,” said Carolyn McClanahan, a physician and certified financial planner and the founder of Life Planning Partners in Jacksonville, Florida.
If you’re willing to go out the night before or the night after or more, the move “can potentially be a way to save,” said Ted Rossman, a senior industry analyst at Bankrate.
2. Make a special meal at home
Try to make some adaptations if you’re unable to shift the date or be flexible with timing, Rossman said.
For instance, red roses go “sky high around Valentine’s Day,” he said. “Maybe you could get a different type of flower.”
If you’re having a hard time booking reservations or costs are too high, try cooking a special meal at home, or something that you wouldn’t normally prepare, experts say.
“Buy yourself a really good bottle of wine and cook something special,” said McClanahan, a member of CNBC’s Financial Advisor Council.
3. A meaningful gift
If you plan to give your significant other an extravagant gift like a piece of jewelry, keep this in mind: “The more expensive the jewelry doesn’t mean the more love you’re giving,” McClanahan said.
Instead of jumping immediately to high-ticket priced items, consider what your gift-giving history with each other has been like, McClanahan said.
“Get something special that may not be as expensive, that something a person would really want,” she said.
Martin Barraud | Ojo Images | Getty Images
As U.S. home equity climbs, owners are more likely to face capital gains taxes from selling property. But a lesser-known tax strategy could help shrink your bill, experts say.
When selling your main home, there’s a special tax break that shields up to $250,000 of profits for single filers and $500,000 for married couples filing jointly. However, you need to meet certain rules.
An increasing number of home sellers are exceeding those thresholds, according to a 2024 report from real estate data firm CoreLogic. Nearly 8% of U.S. homes sold in 2023 exceeded the capital gains tax limit of $500,000 for married couples, up from about 3% in 2019, the report found.
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Those percentages were even higher in high-cost states like Colorado, Massachusetts, New Jersey, New York and and Washington, according to the CoreLogic report.
Exceeding the $250,000 and $500,000 exclusions is “becoming more common,” said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.
Home sale profits above the $250,000 or $500,000 thresholds are subject to capital gains taxes of 0%, 15% or 20%, depending on your taxable income.
Increase your ‘basis’ to reduce profits
Many home sellers don’t realize they can reduce capital gains by increasing their “basis,” or the home’s original purchase price, according to Mark Baran, managing director at financial services firm CBIZ’s national tax office.
You can increase your basis by adding “capital improvements,” such as renovations, adding a new roof, exterior upgrades or replaced systems.
Your “adjusted basis” is generally the cost of buying your home plus any capital improvements made while you own the property.
“That adds up over time and can bring them fully within the [$250,000 or $500,000 capital gains] exclusion,” Baran said.
However, you cannot add home repairs and maintenance, such as fixing leaks, holes, cracks or replacing broken hardware, according to the IRS.
You also can reduce your home sale profit by adding fees and closing costs from the purchase and sale of the home, according to Lucas.
The IRS says some of these expenses could include:
- Title fees
- Charges for utility installation
- Legal and recording fees
- Surveys
- Transfer taxes
- Title insurance
- Balances owed by the seller
“Maybe that gets you an extra few thousand” to reduce the profit, Lucas added.
Traders on the floor of the New York Stock Exchange at the opening bell in New York City on Feb. 12, 2025.
Angela Weiss | Afp | Getty Images
Stock market investors enjoyed lofty annual returns over the past two years. However, 2025 may not offer a “three-peat,” investment analysts say.
The S&P 500 stock market index yielded a 23% return for investors in 2024 and 24% in 2023. (Those returns were 25% and 26%, respectively, with dividends.)
Three consecutive years of total returns of more than 20% for U.S. stocks is a historical rarity. It has only happened once — in the late 1990s — dating back to 1928, according to Scott Wren, senior global market strategist at the Wells Fargo Investment Institute.
“Do we expect an S&P 500 Index three-peat in 2025? In short, no,” Wren wrote in a market commentary Wednesday.
The U.S. stock market has delivered average annual returns of roughly 10% since 1926, according to Dimensional, an asset manager. After accounting for inflation, stocks have consistently returned an average 6.5% to 7% per year dating to about 1800, according to a McKinsey analysis.
“We have been spoiled as investors” the past two years, said Callie Cox, chief market strategist at Ritholtz Wealth Management.
“Twenty-percent gains haven’t been the norm,” Cox said. “Twenty percent gains are the exception.”
What might ruin the party?
While history “isn’t gospel,” there are reasons to think the stock market may not perform as well in 2025, Cox said.
For one, there are many uncertainties that could negatively impact the stock market, including tariffs and a potential rebound in inflation, Wren said. A surge in bond yields might also pose a headwind, Wren wrote in a market commentary. (Higher yields could dampen demand for U.S. stocks.)
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Additionally, technology companies have been a major driver of S&P 500 returns in recent years but may not be poised for the same outperformance this year, Cox said.
Tech stocks suffered a rout in late January, for example, amid fears of a Chinese artificial intelligence startup called DeepSeek undercutting major U.S. players. Those stocks have largely recovered since then, however.
In all, a rosy backdrop of solid economic growth and consumer spending, coupled with relatively low unemployment, may push the S&P 500 up by about 12% in 2025, Wren wrote. That would be slightly better than the long-term historical average, he said.
“So do not be disappointed,” Wren wrote. “We think investors should be optimistic.”
However, investors shouldn’t let high expectations cloud judgment about market risks, Cox said.
The current environment is one in which investors should “prioritize portfolio balance” and long-term investors should ensure their portfolio is in line with their targets, she said.
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