Despite upbeat consumer confidence data, Wells Fargo Head of Advice & Planning Michael Liersch cautions that uncertainty persists entering 2024 surrounding financial planning. He notes there to be "optimism for the future, [while] also preparing for the worst."

With the new year following a typically expensive holiday stretch, Liersch tells Yahoo Finance that consumers should consider what spending levels they feel like they can "sustainably afford to spend" rather than overextending. As people often overspend on gifts at the cost of financial goals, Liersch suggests tempering discretionary purchases in 2024 to promote stability.

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Video Transcript

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DIANE KING HALL: New consumer confidence numbers coming out today shows an optimistic outlook on the economy and personal finances. But there's still anxiety for many Americans managing debt or trying to buy a home. Our next guest says those two things are among the top financial goals in the new year.

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Joining us now is Michael Liersh, Wells Fargo head of advice and planning. Michael, it's always great to have you on. So when you think about how consumers are feeling compared to the data you have, what's, I guess, the divergence?

MICHAEL LIERSH: So when we think about how consumers are feeling that optimism and the data that people are still managing, spending, managing credit and debt, they want to buy a home, they want to prepare for emergencies, the idea here is that we all still moving into a relative sense of uncertainty in 2024. Is the economy still going to be sustained beyond any kind of recession? Is inflation-- are we still going to see it drop? Is the Fed going to really move forward with cutting interest rates? There's still that uncertainty. So it's a bit of A Tale of Two Cities, some optimism for the future, but also preparing for the worst.

DIANE KING HALL: And then how do you prepare for the worst? Because there's been a lot of data that we've seen over this holiday season about the rise in BNPL. What would you advise consumers to do? Sure, it doesn't carry the same kind of, I guess, credit debt issues, rather, that credit cards carry when you're thinking about, say, high-- super high interest rates. But what is it that consumers need to keep in mind about preparing for the worst or just the unexpected?

MICHAEL LIERSH: So there are three things that I would consider. The first is really thinking about how much you can sustainably afford to spend in the new year. And so a lot of people go into the new year, they've already positioned themselves in a way that maybe doesn't set themselves up for success, because they've overspent during the holidays. We're approaching that time right now for a lot of Americans. And also, they've kind of kicked the can down the road on some of the things that they've wanted to do in terms of their goals. So they could afford gifts.