51% of Americans Say They'll Spend Less on the Holidays -- and Recession Fears Are Largely to Blame

Are you planning to cut your holiday spending?

The holidays are right around the corner, and at this point, many people are busy making their shopping lists and hitting the stores in an effort to find gifts at a discount. But before you get too deep into shopping mode, it's a good idea to set a holiday spending budget so you know how much money you can afford to part with. Doing so might lower your chances of closing out the holiday season with credit card debt.

That said, the holiday spending budget you land on may be a lower number than what you've spent in previous years. And if that's the case, you're in good company.

In a recent Momentive study, 51% of consumers say they'll be spending less this holiday season than they have in the past. And there are different reasons for that.

For 64% of people, rising food costs are fueling holiday budget cuts. For 49%, rising energy prices are to blame. And let's not gloss over the 44% of people who say they're spending less on the holidays this year due to recession fears.

If you're worried about an upcoming economic downturn, or if money has gotten tight, then cutting back on holiday spending is a solid decision. But that doesn't mean you're destined to be miserable during the holidays. Quite the contrary -- there are things you can do to make the most of your limited budget.

How to stretch your budget this holiday season

Making good use of a more limited holiday spending budget really boils down to setting priorities. Think about the expenses you might incur in the next few weeks and decide which holiday-related purchases are most important to you.

If you don't want to cut back on gifts, you may need to cut back on decorations. Or, you might do the opposite -- host your usual holiday gathering and adorn your home with lights, but spend less on gifts.

You can also try upholding your regular traditions in a more cost-effective manner. Instead of buying every person on your list a $40 gift, stick to small comfort gifts you can scoop up for $15 or less -- things like warm socks, throw blankets (these go on sale often and can be quite affordable), winter accessories, or even hot chocolate kits. And instead of spending $300 to cater Christmas dinner, make it a potluck affair so you only have to cook a couple of dishes and spend just $75.

Should you cut back due to recession fears?

There's no guarantee that a recession will hit in 2023. But many financial experts seem convinced that the economy will take a turn for the worse.

If that has you worried, it definitely pays to spend less on the holidays and sock more money away in your savings account. But again, that doesn't mean your holidays are doomed. If you're get creative and set priorities, you may find that you're able to pull off a fantastic holiday season, all the while keeping your spending down.