A research firm estimated the average American would spend nearly $1,000 on Christmas this year, and many will put those gifts on at least one credit card.

The 33rd annual survey conducted by American Research Group Inc. found shoppers would spend an average of $983 for gifts, compared to $929 last year. The group said average planned shopping peaked in 2001 at $1,052.

Those numbers are a relative drop in the bucket compared to the average American credit card debt. A study released this year by nerdwallet.com found the average American household has a credit card debt of $15,654. Another group, National Debt Relief, estimates the average Alabama household has a credit card debt of $5,237.

Nerdwallet.com estimated Americans’ total credit card debt to be $905 billion, an 8-percent increase from the previous year.

Robert Harris, a credit counselor with Family Security Credit Union in Decatur, said spending on Christmas and vacations is where many people get into trouble with credit card debt.

“They spend money they don’t have and then get laid off or have a child who goes into the hospital or their car breaks down,” he said. “They may need a new engine, but they spent all that money on Christmas.”

Harris suggested people begin saving 12 months in advance for Christmas. He advised putting a little money aside each month so cash can be used for shopping instead of credit cards.

“I wouldn’t use credit to finance Christmas unless I could pay it off in 30 days,” he said. “It’s the same with vacations. If I know I’m going on vacation in July, I’m going to figure out what it’s going to cost me in advance and divide that by 12 (months) so I know the amount I need to save per month. If I’ve only got 80 percent by the time I go on vacation, I know that’s all I can spend.”

Young spenders

Harris said young people tend to be hit hardest by credit card debt because of an “I want it now” philosophy. He explained many young people use credit cards to supplement their income, forgetting it’s another form of debt until it’s time to make a payment.

“They may pay $50 a month on one credit card and then go and get another with a $1,000–$2,000 credit limit. They don’t realize it’s a loan,” he said. “People run into the same thing with checking accounts (and debit cards). We don’t write checks that often, but we use plastic and don’t keep a running total of our balance. Before we know it, there’s a deficit in our checking account and we owe the banks overdraft fees.”

According to a forecast by International Council of Shopping Centers, millennials plan to spend an average of $554.40 on holiday gifts. Fifty-four percent of millennials said they would make their holiday purchases with debit cards or cash.

Start the new year off right

Harris explained being financially responsible shouldn’t be a concern at Christmas but a year-round goal. When offering credit counseling, he often asks people why they have no savings. The most common answer he hears is, “There’s nothing left over,” but he insists there’s always a way to save.

“If people would learn that ‘savings’ should be paid like a bill, their habits can change,” he said, adding people should set money aside for their future each time they pay their bills. It doesn’t have to be a large amount. Harris added $10 or $20 a month is better than nothing at all.

Just to prove there can be money left after the bills are paid, Harris suggests tracking what you spend each day and write down where the money goes. At the end of the 30-day period, look at the list and put it into categories like food, gas, utilities, etc.

“Once you’ve reviewed (the budget), ask yourself was it a need or want,” he said. “Eliminate your wants and take care of your needs.”