Cloudy holiday spending forecast this year

The holiday shopping season is right around the corner. Have you set your budget yet?

The National Retail Federation says the average holiday shopper is expected to keep it modest this year. According the NRF's holiday consumer spending survey, the average shopper will spend around $700 on gifts, decor, greeting cards and more. That's a 2% drop from last year.

Despite that, the NRF is forecasting holiday sales will increase 3.9% to over $600 billion.

According to the survey, the biggest portion of shoppers’ budget will go towards gifts for family members, with the average person planning to spend $415.50 on mom, dad, and other loved ones, down slightly from the actual $423.36 they spent last year.

With plenty of options to shop around for the best value, consumers will look to discounters (64.7%), department stores (56.3%), and grocery stores (51.1%) for their gifts and goods this holiday season.

More than half (51.5%) will shop online and 35.1 percent will shop at clothing or accessories stores. Additionally, 29.5 percent will shop at electronics stores and 20.9 percent will shop at drug stores.

The survey polled 6,415 consumers and was conducted for NRF by Prosper Insights & Analytics, October 1-8, 2013. The consumer poll has a margin of error of plus or minus 1.2 percentage points.