The holidays are supposed to be a time of joy, but for countless Americans, they're nothing more than a period of stress and regret. And part of the reason is that many of us make poor financial decisions this time of year. Nearly one-third of Americans took on credit card debt to cover their seasonal spending, according to a new COUNTRY Financial survey. Not only that, but 18% of consumers withdrew money from savings to afford their gifts.

There's no arguing that racking up debt is a dangerous practice, but you may be wondering: What's so terrible about taking money out of savings to pay for holiday purchases?

Man holding his head in frustration


Let's clarify: Technically, there's nothing wrong with that if your savings level is healthy. If, for example, you have a solid three-to-six months' worth of living expenses in the bank for emergencies, and the money you withdraw to pay for gifts and such is excess savings on top of your emergency fund, then you're actually not making a mistake at all.

The problem, however, is that most Americans didn't start off the holiday season in particularly great financial shape this year. Quite the contrary: The majority of working adults are glaringly behind on personal savings. An estimated 57% have less than $1,000 in the bank, while 39% have no savings at all. If your account balance hovered somewhere in, say, the $800 range earlier this month, and you withdrew $500 of that to pay for holiday gifts, then yes, you made a major mistake, just like your fellow shoppers who walked away in debt. And it's one you'll no doubt regret the moment a real financial emergency strikes.

A better approach to holiday spending

If you took on debt or obliterated your savings this holiday season, here's some good news: If you plan accordingly, you need not repeat that mistake next year. The first thing you'll need to do, however, is come up with a 2018 holiday budget as early as January. This way, you'll know what you need to cover your expenses and can begin saving as soon as the new year kicks off.

The next step in the holiday planning process involves figuring out where that extra money is going to come from, and you have several choices here. You can opt to work a side hustle, which is a guaranteed means of bringing in extra money. You can also cut some minor living expenses, like your cable package or takeout habit, to free up the holiday cash you'll need. The key, however, is to know where that money will come from so you're not forced to charge your purchases, or withdraw from your emergency fund on the spot.

There's also a potential hidden step in between, and it's evaluating your budget to see if you really need to spend as much as you think you do. It's nice to enjoy the holidays, but that doesn't have to mean showering everyone on your guest list with elaborate gifts.

If you were among the many consumers who accumulated debt this year, then your approach in 2018 should be a bit different. That's because, on top of saving for the upcoming holidays, you'll also need to work on shedding your recent debt quickly to avoid having those interest charges escalate. To accomplish that goal, you'll definitely want to either commit to a secondary gig, or make a few major changes, not minor ones, to free up money and pay down your balance. This could mean downsizing to a smaller apartment, giving up a vehicle you can technically do without, or pledging to forgo restaurant meals completely until your debt is gone.

Don't forget your emergency savings

Obviously, we've been talking about the dangers of poor holiday planning and ways to avoid it going forward. But let's not gloss over the fact that most Americans are very behind on emergency savings, which is why it's such a bad thing that they're tapping their bank accounts for holiday purposes.

As you develop your personal approach to saving for next year's holidays and paying down this year's debt, you should also think about where your emergency fund stands, and what it will take to bring it up to a healthier level. Saving for the holidays is no doubt the responsible thing to do -- but saving for emergencies is even more crucial.