America's Booming 'Christmas Capital' Is A Charming Pennsylvania City With A Below-Average Cost Of Living

The city of Bethlehem can instantly make people think of Christmas. With a population inching towards 80,000 in 2024, this eastern Pennsylvania city is located about 70 miles north of Philadelphia. Nearby towns continue the Biblical theme, with the less populated Nazareth and Emmaus. According to the National Catholic Register, 18th-century Moravians — (German Protestants who settled this area) — wanted to recreate the Holy Land in the United States, and as such chose these city names intentionally. With this in mind, it's only natural that the Christmas holiday takes on special meaning in this area.

Besides being surrounded by Christmas cheer, people can also live more cost-effectively in this holiday-themed city. According to the Economic Research Institute, as of May 2025, Bethlehem residents enjoy a lower cost of living than average: 3% below the overall average in the United States and 1% lower than other locations in Pennsylvania. This research assumes an annual salary of $72,000, with the person living in a two-bedroom apartment. Specific expenses that are more affordable than average in Bethlehem include food, transportation, housing, and health care.

Visitors to Bethlehem are sure to note the city's star. Although not literally a star, the city's Star of Bethlehem structure serves as both a navigational and inspirational tool. This lighted star, built in 1937 on the peak of nearby South Mountain, looms more than 90 feet in the air and is 40 feet wide and can be seen from 20 miles away. Residents and visitors alike can see the star when traveling down the highway, while shopping on Bethlehem's Main Street, or while checking in at the historic Bethlehem Hotel.

Living in Bethlehem can definitely make it easier to shop for the holiday season. Besides paying less, on average, for essentials like housing and food, shopping opportunities abound. Options include the city's German-style Christkindlmarkt — which contains booths featuring antiques, holiday ornaments, handcrafted goods, and locally made foods — which is open from mid-November through late December. Similarly, Bethlehem's Main Street becomes Christmas City Village for the six weeks before Christmas, complete with  a collection of themed shopping huts. Shoppers can also enjoy locally decorates evergreens on Christmas Tree Trail, or rest their weary feet by riding in a horse drawn carriage. 

Whether living in or visiting Bethlehem, it may be more tempting to overspend at Christmas time with all of the shopping choices available. Americans continue to spend more on Christmas, with GALLUP finding that people spent an average of $975 on gifts in 2023, and planned to spend an average of $1,012 in 2024.

To keep Christmas spending under control, maximize your holiday budget by considering whether the gift will bring joy to the intended recipient before purchasing. Issues to think about include whether the gift will serve as a welcomed surprise, help to form lasting memories, and/or allow the recipient to enjoy more free time (like a babysitting gift certificate would). Another way to optimize holiday budgets is to spend less on gift wrapping by creatively using recycled newspaper comics or decorating brown parcel paper. Then, you can use those savings on more elaborate gift giving, a dinner out, or even as the start of a savings account for next year's holiday season. Bethlehem will surely provide plenty of gifts then, as well.