The Average American Will Spend $936 on Gifts This Holiday Season -- How Do You Compare?

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How much will the average American spend during the 2016 holiday season? The short answer is $935.58, according to the National Retail Federation, but many people will spend much more than this, and many will spend much less. Here's a breakdown of the numbers so you can compare them with your own holiday bills.

Average spending on gifts

According to a survey by the National Retail Federation, the average consumer who celebrates one of the major holidays plans to spend $935.58 on the holidays this year, including gifts for others, as well as spending on items for themselves, food, flowers, decorations, and greeting cards. Separately, another survey conducted by the American Research Group found a similar average planned spending of $929, an increase of 5% over 2015.

Furthermore, a survey by TD Ameritrade breaks the population into spending brackets:

Spending Range

% of Population









Data source: TD Ameritrade. Percentages don't add to 100%, because some respondents said they didn't plan to spend anything, while others planned to spend more than $2,000. Unlike the other two surveys mentioned above, the TD Ameritrade survey didn't exclude people who don't celebrate a major holiday.

Furthermore, the TD Ameritrade survey found that 37% of consumers don't track their holiday spending at all, and simply spend what they want. And a total of 63% either save money specifically for holiday gifts or cut back on other expenses to make up for it.

How to make the holidays easier on your wallet

One of the most effective ways to make the holidays easier on your wallet is to spread out your spending. Obviously, this may not help you this year since it's already December, but in the future, you may want to start shopping before the "holiday shopping season" starts, or at least save money gradually for a few months before.

The National Retail Federation survey found that just 18% of consumers wait until December to start shopping, while more than 40% planned to start holiday shopping in October or earlier. I admittedly found this statistic to be surprising, but it makes perfect financial sense. After all, a $1,000 expense spread over three or more months is much easier to plan for than the same expense crammed into just a few weeks.

Another way to make the holidays easier is to take advantage of interest-free financing opportunities. Many retailers advertise no-interest financing, but it's important to be aware that these offers generally refer to deferred-interest financing. In other words, the interest accumulates from day one, and will be added onto your balance if you haven't paid for the entire purchase before the introductory period is over. Don't get me wrong -- these deals can be useful. In fact, I used a deferred-interest offer to buy furniture for my house last year. Just know what you're getting into first.

For true no-interest financing, there are some impressive offers from credit card issuers right now. I recently wrote that now is a great time to get a credit card, thanks to an extreme level of competition in the industry, and this has produced some of the best introductory offers yet. For example, the Citi Simplicity card offers a 0% APR for 21 months -- truly no interest, not just deferred -- and has no annual fee.

What not to do this holiday season

Don't ignore your budget and spend money that you'll regret later. This may sound obvious, but as I mentioned, nearly 40% of people don't keep track of their holiday spending at all, and when you don't monitor your spending, it's easy for it to get out of hand. Small extra gifts add up quickly, as do those things we see in the store and buy for ourselves. Give generously this holiday season, but plan a budget and stick to it.

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Matthew Frankel has no position in any stocks mentioned. The Motley Fool owns shares of and recommends TD Ameritrade. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.