By Dan Malachowski, Salary.com

Are you planning to spend more or less at Christmas this year than last? If you're like most folks, according to a recent Salary.com survey, you will be spending slightly less.

The Needham compensation research firm releases today the results of their 2005 Holiday Shopping Survey, which found that on average, people in the U.S. workforce expect to spend 7 percent less on holiday gifts in 2005 than in 2004.

Salary.com reports that nearly 40 percent of workers who responded expect to spend less on holiday gifts in 2005 and 21 percent expect to increase spending. Rising home heating costs, increases in medical insurance premiums, and college tuition hikes were the top three reasons for the predictions of decreased spending. On top of that, nearly 60 percent of workers indicate that they do not expect to see a holiday bonus from their employer this year.

Though spending is down, the average American worker shouldn't feel like a Grinch just yet. The survey indicated that the individual American worker still plans to spend an average of 2.4 percent of his/her salary ($1,037) on the holidays in 2005.

They will just be more selective with their holiday dollar this year. According to the survey, workers reported their top five most expensive holiday purchases this year, which ranked (in order of popularity):

1. iPod
2. Digital Camera
3. Xbox
4. Play Station
5. Computer

The only income bracket that showed a marked increase from 2004 to 2005 in terms of holiday spending were those earning less than $25,000, who indicated in the survey that they would be spending 5 percent more this holiday season. The biggest year over year change in holiday spending occurred in the $25,000 - $50,000 income bracket, who felt as if they would be spending around 11 percent less in 2005 than in 2004.

According to Bill Coleman, senior vice president of compensation at Salary.com, "the survey results show an income threshold, which seems to be when workers start to earn 6-figure salaries, where they can absorb the rising living costs around them and not have to adjust their spending on the holidays." This is shown by the fact that workers earning between $100,000 and $500,000 per year plan to spend almost exactly the same on the holidays in 2005 as they did in 2004.

"It's the average worker, who has a house to heat, insurance premiums to pay, maybe even kids in college, who will be watching their pennies this 2005 holiday season," Coleman says.

Salary.com survey methodology

Salary.com surveyed 1,000 Salary.com members to derive the data for the 2005 Holiday Shopping Survey. Respondents were asked how much they spent on the holidays last year and how much they expect to spend this year. If a year over year holiday spending change occurred, respondents were encouraged to tell Salary.com why. Respondents in the $25,000 and under income category include part-time workers. Expected bonus data came from the pool of 1,000 submissions. Data was scrubbed for inconsistencies and analyzed by Salary.com's expert team of certified compensation professionals.

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