“Last year I really overspent on Christmas gifts. In fact, I’m probably still paying for some of them now, as I have a large credit card balance that I’m trying to pay down. I really don’t want this to happen again this year, but I feel that once I hit the plazas, I’ll lose control. Please help me to curb my Christmas spending!”

With only about 18 shopping days left to Christmas day, the seasonal spending frenzy is about to get into high gear. Sometimes reasoning and control will fly out the door, as we get caught up in the hype fed to us by the retailers.

After all, this is the time of the year when many shop owners make more money than the rest of the year combined!

While we do want to support a vibrant economy, we can’t afford to lose sight of all our financial goals, or worse, incur massive debt. Here are some tips that will help you to control the urge to splurge this Christmas:

Know Your Spending Limit

Many times we start buying gifts without first considering how much money is truly available to purchase them. It’s important to first make a budget that outlines how much you can spend in the context of all the other demands on your limited income.

Remember that if you spend more than you’re able to on gifts, you’ll be taking funds away from some other important necessities. Your budget will help you to prioritize your spending and stay focused.

Make A List

Don’t start shopping without making a list of all the persons you wish to give presents. This helps you to allocate your budgeted amount among all your friends and relatives. You can decide who will get the more expensive gifts and who will get the tokens. Use your list to also write down exactly what you think each person would really want for Christmas.

If you don’t plan ahead, you’ll probably end up buying something just for the sake of getting a gift, and the recipient might end up not liking it or using it. When that happens, your money will just be wasted.

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Don’t Window Shop

Once you’ve made your list of names and gift items, write down all the possible locations where you think the presents can be found. Then go directly to these stores and look only for the gifts that you planned to buy. This will help to prevent you from wandering aimlessly through stores in search of presents, and buying other items that you didn’t plan for or really need.

Don’t Buy On Credit

Even the most disciplined person can get caught up in the shopping whirl when there’s a credit card or two in hand. You see things that you just have to have, you feel the need to reward yourself for the year’s hard work, and you tell yourself that you’ll figure out how to pay for it later. What that thinking leads to is nothing but high-interest debt!

I’ve read somewhere that research has proven that people who shop with credit cards are willing to spend as much as 30 per cent more for items than if they were to pay cash for the same item. However, if you’re confident in your self control, then you can use your credit card as long as you stay within the spending limit that you’ve set, and you pay off the balance when it’s due.

Be Creative

If after you’ve done your budget you realize that you don’t have enough money to purchase nice gifts for everyone on your list, then it’s time to get creative. Remember that your objective in giving presents is to show your appreciation. You can accomplish this without spending a lot of money.

Maybe you can give out gift certificates for services like a manicure or a massage that you’ll do personally. If you have talent in the kitchen you can give cakes, or offer to cater for your friends’ Christmas dinners. Think about each person and figure out something that you can do for them that they will really value and remember for longer than a physical gift.

Start Planning For Next Christmas

The smart way to conquer Christmas spending is to start planning for it several months in advance. When you’ve established your spending limit, save a fraction of it every month so that next year you’ll comfortably have what you need.

You can also buy presents throughout the year. This way you’ll probably spend less, and be able to put more thought into getting the perfect gift.

Copyright © 2006 Cherryl Hanson Simpson. No reproduction without written consent.

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Originally published in The Daily Observer, December 07,  2006

Cherryl is a financial columnist, consultant and coach. See more of her work at www.financiallyfreenetwork.com and www.financiallysmartonline.com. Contact Cherryl