Under the shadow of a still-sluggish economy, many holiday shoppers are embracing healthier money management habits to help keep debt at bay, according to a new survey of 1,000 U.S. adults by USAA. In addition, this back-to-basics approach appears to have many shoppers feeling optimistic about this year’s holiday shopping with nearly half (48 percent) of survey respondents saying that the movie titles “It’s a Wonderful Life” and “Jingle All The Way” best describe their approach to this year’s holiday budget. 

While the National Retail Federation (NRF) predicts a one percent drop in overall retail sales over the holidays, the positive outlook of many survey respondents may be linked to their plans to avoid debt by using cash instead. According to the survey: 

• The majority (85 percent) of respondents plan to use cash to make holiday purchases this year. 
• Two-thirds (62 percent) plan to use more cash than last year. 
• More than half (56 percent) of the consumers who plan to use cash for holiday purchases have been saving either diligently or a little here and there throughout the year. 

At the same time, many shoppers appear to be leaving their credit cards at home with more than half (55 percent) of respondents planning to not charge holiday purchases this year. Even among those shoppers who will use credit, the majority do not plan to pay interest on their purchases: 

• 74 percent of those who will use a credit card to make holiday purchases plan to pay off the balance immediately. 
• One in five (20 percent) say they will pay off the balance in a few months. 
• Just seven percent say they will pay the minimum balance. 

Most (64 percent) shoppers surveyed also plan to continue their tradition of typically creating a holiday shopping budget, and many (56 percent) plan to stick to it. One in ten (10 percent) respondents who don’t typically create a budget will create one this year to better manage their money. 

“Saving money in advance, creating a budget and using cash instead of credit is the recipe for success when it comes to holiday spending because it helps you avoid debt,” said Joseph Montanaro, a CERTIFIED FINANCIAL PLANNER™ with USAA. “The survey results highlight one of the key lessons of the recession, which is that reducing debt puts you on the road toward financial stability.” 

However, some respondents are less sure about their ability to put healthy spending habits into place this year. More than one third (38 percent) of respondents said the movie titles “Surviving Christmas” and “Mixed Nuts” best described their holiday budget. In addition: 

• Fifteen percent of respondents plan to charge more on their credit card than last year when making holiday purchases. 
• Nearly one in five (19 percent) are not sure as to how they will pay for their holiday purchases. 
• More than one in five (22 percent) of those who plan to use cash to pay for holiday purchases haven’t saved any money in advance. 
• Nearly one-third (28 percent) of those who typically develop a holiday shopping budget spend more than they budgeted. 

“The good news is that it’s not too late to put a realistic holiday spending plan in place,” said Montanaro. “While cutting back may be difficult, the best gift you can give yourself is not piling on more debt. Keep in mind that it would take more than five years to pay off $500 on a high-interest credit card by only paying the minimums each month.” 

With respondents choosing paying off holiday debt as their least favorite holiday activity, Montanaro encourages holiday shoppers to “stay focused on the spirit of the holidays instead of overspending.”