Can You Afford to Spend $593 on Holiday Gifts? That's What Americans Plan to Spend on Average

It's clearly not a small number.

For some people, their favorite part of the holidays is showering the important people in their lives with gifts. But sometimes, that could lead to a world of unfavorable consequences.

In a recent CouponFollow survey, respondents said they plan to spend an average of $593 on holiday gifts this year. Now on the one hand, that's a 9% decrease from 2021. On the other hand, it's still a lot of money to spend at a time when inflation is soaring and many people are already consistently raiding their savings due to higher living costs.

If you want to avoid closing out the holiday season with credit card debt, then it's imperative that you do what you can to shop judiciously. Here are the steps to determine how much you can afford to spend on gifts.

Step 1: Set a total holiday spending budget

Before you start your holiday shopping, it's a good idea to look at your finances and figure out how much you can afford to spend on the holidays all-in. Maybe you have enough money between leftover savings and your upcoming paychecks to cover $600 worth of expenses. That gives you a baseline to work with.

Step 2: Figure out where holiday gifts fall in terms of priority

You might have a certain budget for holiday spending -- but that doesn't mean you can or should max it out on gifts alone. What if you need to reserve some money to pay for a flight home in December? Or what if you're hosting for the holidays, and therefore need to spend money on an elaborate meal for a crowd?

Order your holiday expenses by most to least important and see where gifts fall in line. That will help you figure out how much to spend on them.

Step 3: See if you can offset your costs with credit card rewards

Maybe, after crunching numbers and setting priorities, you're only left with a $300 gift buying budget. But if you're also sitting on $200 in credit card rewards you've yet to cash out, that gives you more leeway to buy presents for the important people in your life.

Step 4: See if you have unused gift cards

You may have been given gift cards for past holidays or birthdays you haven't used yet. If you have a $100 department store gift card, or a similar gift card to a big-box store, that's more money you can spend on holiday gifts.

If you can afford to plunk down $592 on holiday gifts like the typical consumer in the aforementioned survey, great. Those gifts might make the people in your life very happy this December. But if you can't swing a number nearly that high, don't sweat it. Instead, make the most of the money you have and try to find gifts that are meaningful to the people you care about. If you put in that effort, chances are, no one will care if the cost of your gifts is lower than it may have been in the past.