Holiday spending will put Americans in massive debt – here’s how to spend wisely

The average person would need approximately $58,673 to help them be debt-free this holiday season

It could take a holiday miracle to get shoppers out of debt.

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An alarming 70 percent of Americans are stressed about the holiday season, with 32 percent worried about their finances, according to a survey from market research firm Ipsos in partnership with Country Financial.

The average person would need approximately $58,673 to help them be debt-free this holiday season, according to the survey. And it’s because consumers aren’t managing their finances, and spending outside of their means. Nearly 40 percent of Americans report not setting holiday budgets and 72 percent of Americans aren’t setting aside any money for holiday expenses throughout the year, according to the findings.

The average person would need approximately $58,673 to help them be debt-free this holiday season, according to the survey.

Crippling debt is souring the holiday season for many. When participants were asked what would be the top holiday gift on wish lists, 49 percent said having one of their debts paid off -- including mortgage (20 percent), credit card debt (13 percent), personal loan debt (9 percent) or student loan debt (7 percent) – making it the No. 1 response. Just 19 percent of Americans said receiving a vacation or luxury item was at the top of their lists.

And many Americans say they’re OK with taking on more debt around the holidays. Indeed, 45 percent of cardholders are willing to take on holiday-related credit card debt this season, according to a separate study by CreditCards.com. More than half (52 percent) of Millennial credit card holders aged 23 to 38 are more willing to accrue debt compared to any other generation, the survey found.

“Financing your holiday expenses with a credit card costs about 20 percent extra because credit card rates are so high,” CreditCards.com industry analyst Ted Rossman said.

Men will outspend women by twice as much this holiday season, and nearly a third of 2,003 males surveyed in a holiday spending report from Debt.com with Tinuiti Marketing plan to shell out more than $500 just on gift cards. Women, meanwhile, are slated to spend $250 or less, according to the survey.

Here are easy ways to save and cut back on spending this holiday season:

Make a holiday savings plan early

It’s not too late to start stashing away a few extra bucks before the holidays.

Michael Bovee, a consumer debt expert for HelloResolve.com, suggests making a list of everyone you need to buy gifts for and setting a budget of how much you can spend. Then, calculate the money you anticipate spending on holiday travel and food costs.

Bovee says it's helpful to make a list before you go shopping to avoid impulse purchases. (AP Photo/David J. Phillip, File)

“Gift-buying is only one part of holiday spending. If you travel for the holidays or host family or friends, you’re looking at bigger expenses for travel, food and, potentially, accommodations. Account for all of that in your budget when you’re factoring in how much you’ll need to get through the holiday season debt-free,” Bovee said.

Once you set a budget, Bovee urges shoppers to save receipts of purchases or use money-tracking apps to monitor spending so you don’t go over your limit.

Track spending

Take advantage of setting alerts for flash sales and flight trackers if you plan on traveling to monitor affordable options, Bovee said. Subscribe to discount codes for online shopping via a brand’s newsletter, or simply Googe coupons for products you plan on buying. Programs like Honey, for example, a free browser extension, automatically apply coupon codes when shoppers search specific sites.

“Make it a rule to always search for a coupon before making any online or in-store purchase. Odds are, you’ll be able to save something, even if that’s simply shipping fees, but we suspect you’ll find deeper discounts if you do a little digging,” Bovee said.

Resale sites like eBay can also be helpful in finding large-ticket items like TVs or furniture.

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Use credit card points

If you're shopping with a credit card, be sure to use one that offers the best rewards points so you can get free money or discounts while you shop. Citi Double Cash Card gives users 2 percent cashback, 1 percent on all purchases and 1 percent after shoppers pay off their bill. Those who are spending money on food may want to take advantage of rewards points using the Blue Cash Preferred Card from American Express, which gives 6 percent cashback with supermarkets.

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