Ten Unique Yet Frugal Holiday Gifts

1. A framed photograph of you and the recipient

2. A pre-paid coffee shop card

3. A pre-paid phone card

4. A poem, song, or story written by you and featuring the recipient

5. A large box of candy and a couple of movie tickets

6. A magazine subscription

7. Homemade stationary and pack of stamps

8. Candles that smell like the recipient’s favorite fruit

9. Lottery tickets and a four leaf clover

10. Seeds from the recipient’s favorite flower and a pretty flowerpot

“The greatest gifts you can give your children are the roots of responsibility and the wings of independence.”

– Denis Waitley

The holiday gift season is once again upon us, and so are its tremendous expenses. Intensified marketing, a lifetime of tradition, and entrenched expectations often result in a flurry of daunting bills in the New Year. Shopper’s remorse is common – according to a recent survey, 35 percent of us regret the amount of money we spend during the holidays.

You can make this year a financial success by combating the powerful internal and external forces that lead to overspending.

Establish a Spending Cap. How vital is it to cap a spending limit before shopping? Studies show that without setting a predetermined maximum, we spend 36 percent more for gifts. Therefore, coming up with a set figure of cash that you are willing to spend is key.

To get a precise idea of your holiday budget, find out how much you currently have in your accounts and what you project you will have after subtracting everyday expenditures. Then, add any extra income or bonuses (but only if these are definite). You may want to liquidate some assets to bump up the amount. However, the figure you come up with shouldn’t put stress on your normal essential expenses or detract from other important goals.

Make a List (Check it Twice). After you have set a concrete spending limit, make a list of gift recipients. Have $500 and eight people on your shopping list? That’s just over $60 a person. Make adjustments based on personal priorities – a little more for the kids, a bit less for friends, perhaps. If the cash is spread too thin, consider reducing the number of people on your list or giving token gifts instead.

Research the Best Price. Find gift items that fit within the sum that you have allotted for each person. To reduce guesswork and save time, ask friends and family members to give you a list of several items they want, in a variety of price ranges. Then start bargain hunting. Look for the best deals using coupons, newspaper advertisements, and the Internet. Try not to rely on a physical trip to the stores or mall to comparison shop – you can easily spend more because of enticing displays, or get tired and buy based on convenience rather than the lowest price.

Set Reasonable Expectations. Discuss your financial parameters with loved ones. Of course, many children (and adults!) will want expensive gifts, so if your budget won’t allow it, let them know now. The only thing worse than an overwhelming credit card bill is your child’s crestfallen face at not seeing the expected bicycle under the tree.

Talk with your spouse, partner, and friends about gift-giving protocols. Many will probably feel relieved if you decide to celebrate with a simple dinner party or a card.

Resist Getting into Debt. Too many of us are still paying off balances not just from last year, but from previous years. In fact, only 45 percent of consumers repay holiday credit card debt within six months. Stick to your self-determined cash-only spending limit. If you know you will be tempted to overspend by using credit cards, don’t bring them (use your debit card instead).

Even if you do leave your plastic at home, the lure of credit may still tempt you. Virtually every major retailer is promoting their card right now. With every ring of the cash register, you’ll be cheerfully asked if you want to open a line of credit to “save 10 percent off today’s purchases.” Though it may sound enticing (especially when you’re already looking for discounts), apply prudently. You can easily end up with more credit than you need – and the ability to charge more than you can realistically afford to repay. The same goes for “no interest for six months” offers. If you don’t pay the entire balance in full by that date, the entire (and often high) finance charge will be amortized and added to your bill.

In these stressful financial times, making the most out of every dollar is critical. Spending wisely and avoiding debt now will set the tone for a happy, healthy, and wise New Year.

Debt-Proof Your Holidays
by Mary Hunt (St. Martin's Press)

For more information and helpful tips on how to remain financially solvent during the most costly season of the year, pick up a copy of Debt Proof Your Holidays by Mary Hunt. Renowned frugal guru and founder of The Cheapskate Monthly newsletter, Hunt is an expert in spending, saving, and debt issues. The book highlights the many ways you can enjoy the holidays for very little money. She offers ways to inexpensively – and dramatically – decorate your home, provides alternatives to expensive storebought wrapping materials (they just get thrown away anyway), and how to create special, individualized gifts that your loved ones will truly appreciate. Because we so often spend a tremendous amount of time running around, buying gifts, and worrying about money during this time, one of the most valuable sections of the book reviews thrifty ways to enjoy the holiday season. Her practical yet wonderful suggestions will make this magical time of year memorable for the entire family. As an added benefit, Hunt capitalizes on the cumulative content of The Cheapskate Monthly by including the very best reader’s letters and holiday columns. Debt Proof Your Holidays is an excellent book for anyone interested in toning down the cash outlay while turning up the fun.