Spend, spend, spend! If you only listened to the economic experts who know the importance of consumer spending to the U.S. economy, you might get the idea that a healthy dose of retail therapy is all the market needs to get truly going again. Yet as a CFP, I can’t fully endorse the push for increased consumer spending without expressing some concern. 

Sure it’s good for the overall economy and jobs, but does today’s splurge come at the expense of consumer savings and progress toward long-term financial goals?  Does more spending now also mean more borrowing tomorrow for the big stuff like education, homes, or cars?

Fortunately, CFP Board has some reassuring news on this front. According to its own November 2013 poll on how consumers intended to manage their holiday spending,   consumers were going into the holiday with a notable measure of restraint and budgetary awareness, carried over from holidays past.

A sizable majority of respondents (76 percent) reported using a spending budget for previous holidays, but an even greater percentage (83 percent) said they had a plan for how much they would spend on holiday gifts in 2013. A full two-thirds intended to keep their holiday expenditures the same or less than last year, while just 14 percent planned to spend more. Not surprisingly the “more” spenders were concentrated in the 25- to 34-year-old age group, where their extra expenditures are probably reflective of their changing life circumstances. 

The majority of respondents planning on cutting back their gift spending cited “not having enough money” as their reason. Job loss or worries about the economy are far less important than lack of money: Only 16 percent will reduce their spending because of the economic climate and 9 percent because of unemployment or furloughs. Eighteen percent of those dialing down their spending had “other reasons” for doing so, such as retirement or kids leaving home.

The best news from the survey, at least from my perspective as a financial planner and consumer advocate, were the following:

  • The majority of those surveyed did not plan to finance their holiday spending with plastic or loans:  52 percent said they would use savings; another 5 percent would use their year-end bonuses. A small 2 percent said they would resort to payday loans.

  • Only 1-in-5 respondents thought they would go into debt during the holidays. Of those going into debt, 69 percent expected to rack up $500 or less in new debt, with the majority of them coming in at $200 or less.

  • There wasn’t just a lot of spending planned for the holidays: There was some saving planned, too. When CFP Board asked about what respondents would do with gifts of monetary value that they receive this holiday season – such as cash or gift cards – 65 percent said they would save the gift or use it to pay down debt.

A few honorable mentions are in order for certain subgroups of the survey:

  • Women – at least in years past – are more budgetary-minded than men, with 50 percent reporting they came in “on budget” with holiday spending compared to 42 percent of men.

  • Of those respondents who said they would be adding debt, college grads were significantly more likely to get that debt paid off within three months or less than those without a degree.

  • The youngest respondents -- 18- to 24-year-olds – were also the most eager to save any money they received during the year in the form of checks or gift cards. A full 60 percent of this age group planned to save the monetary value of these gifts, whereas only a minority of other age groups from 25 to 64 would do the same.