Americans are expected to spend big this holiday season. The average person will drop $819 on gifts and necessities, according to a recent report from Harris Poll and advertising-technology company OpenX.
And a new survey from personal-finance website WalletHub expects them to spend even more: about $1,007 per person, up more than 4 percent from 2017.
But how much can each person actually afford to spend?
WalletHub, using data from the National Retail Federation, compared 570 U.S. cities across five metrics to determine the maximum shoppers there can comfortably afford to spend. Those metrics include income, age, debt-to-income ratio, monthly income-to-expenses ratio and savings-to-monthly expenses ratio.
"At a high level, our algorithm considers a consumer to be in a comfortable financial position to engage in holiday spending if they have: enough emergency savings to cover at least six months of expenses and a debt-to-income ratio smaller than 22 percent for a renter or 43 percent for a homeowner," the survey says.
"Depending on a city's specific characteristics, the algorithm adjusts upward or downward to create a custom estimate."