PRNewswire/ — Holiday spending is about to become another casualty of the recession. In spite of the new trend of holiday in July shopping deals, early holiday sales are doing little to get Americans into the spirit of spending on gifts this year. Only about half of American adults (54 percent) plan to spend $300 or more on holiday gifts, a striking 10 percent decrease from what Americans last year said they typically spend, according to a survey commissioned by ING DIRECT.
Plans to spend less than $300 on holiday gifts remain the same as what Americans in November 2008 said they typically spend. Only 11 percent plan to spend between $1 and $100 this year, which is unchanged from what gift givers in 2008 said they typically spend, and 23 percent plan to spend $100 to $299 compared to 21 percent of what Americans last year said was the norm. Additionally, 11 percent indicated they do not plan to spend any money on gift giving in 2009, compared to 7 percent, which Americans in 2008 said was typical – a 57 percent increase.
Spending between $500 and $999 is expected to change from 25 percent, which Americans in 2008 said they typically spend, to 23 percent this year. Spending $1,000 or more is also projected to change from 12 percent, which Americans in 2008 said they typically spend, to 10 percent this year.
Northeasterners & Older Americans Plan on Spending the Least
Every region of the country plans to spend less this holiday season than what Americans last year said they typically spend. But Americans in the northeast are cutting back the most on their normal holiday spending. This year, only 57 percent of northeast residents said they will spend $300 or more on gifts, compared to 71 percent, which northeasterners last year said they typically spend.
The change in holiday spending is also happening across all adult age groups, but it is most dramatic among Americans age 55 or older. As they try to rebuild their recession-ridden 401(k) plans and other retirement funds, only 61 percent of older Americans are planning to spend $300 or more on gifts this year, compared to 71 percent, which older Americans last year said they typically spend.
Spending Less, Saving More
By spending less on holiday gifts, Americans are putting their money to work elsewhere: in their savings account, according to the survey results. Four out of 10 (41 percent) Americans say their top priorities will be to save more and spend less for the remainder of the year. Their savings priorities include:
— Building an emergency fund (37 percent);
— Eliminating or reducing overall debt (35 percent); and
— Retirement (34 percent).
Nearly seven out of 10 (67 percent) Americans say they will continue their frugal ways and save their money even after the economy recovers. The survey also reveals that more than eight out of 10 (84 percent) Americans agree that having money in the bank makes them happier than spending money on things they do not need.
The national online survey was conducted within the United States by Harris Interactive on behalf of ING DIRECT between June 30 – July 2, 2009 among 2,047 adults age 18 . The comparison survey was conducted between November 12-14, 2008 among 2,491 adults age 18 . No estimates of theoretical sampling error can be calculated; a full methodology is available.
Source: ING DIRECT