The holiday season is now upon us, which means countless Americans will soon be stretching themselves dangerously thin in an effort to shower loved ones with gifts. Or will they?

New data from TD Bank reveals that Americans intend to spend nearly 30% less on the holidays this year than they did in 2018. Thus, the average consumer expects to rack up a $735 shopping tab -- not as bad as spending $1,000 or more, which was the case last year, but also, not particularly good for those without savings.

And make no mistake about it -- many Americans are indeed without savings. An estimated 60% don't have enough money in the bank to cover a $1,000 emergency expense. And 42% of working Americans have less than $10,000 in retirement savings, which means they desperately need to catch up.

Pile of colorfully wrapped gifts in different sizes.


Before you go out and spend any amount of money on the holidays this year, take a long, hard look at your finances and see if that cash could be put to better use -- because chances are, it can. At the same time, make sure the amount you're planning to spend doesn't drive you into debt, because if it does, you'll be very sorry for it after the fact.

Spend wisely

Spending less money on the holidays this year than you did last year is a smart move -- but if you're looking at spending anywhere in the ballpark of $735, make sure you don't need that money for other purposes first. If you don't have an emergency fund, or have a really small one, then that's the first place your extra money should go. That way, you won't be forced into debt the next time an unplanned bill lands in your lap.

At the same time, assess your retirement savings and see where you're at. If you're older -- say, within 20 years of retirement -- and you haven't begun funding your nest egg, you should really think twice about plunking down money on gifts when your own financial future is on the line.

Even if you're doing reasonably well on emergency and retirement savings, you should make absolutely sure the money you spend on the holidays doesn't result in debt. Paying even a small amount of interest on a credit card balance makes little sense when you have the option to shop more frugally to avoid throwing away money.

Remember, while it's nice to please the people you care about during the holidays, many of your loved ones would probably be horrified to learn that you racked up debt in the course of giving them gifts. So rather than run that risk, cut back this year. Buy things for only a few select people on your list or revert to homemade gifts to let your loved ones know you're thinking of them.

It's more than possible to enjoy the holidays to the fullest without hurting your finances in the process. And if you cut back on spending to pad your emergency or retirement savings, you'll have something extra to be happy about going into the new year.