The holidays are supposed to be a time of joy and celebration. But too many of us find them to be a time of great financial stress too. How can you give gifts to so many loved ones while balancing the need to spend, but not put yourself into a financial bind?

• Make a plan. Just because it’s the holidays, it doesn’t mean you need to spend on impulse. Start well before Thanksgiving by writing out your gift list. Don’t worry about picking any of the gifts just yet. But you can assign dollar amounts. Have a maximum amount you think you can afford, and dial that number back just a bit. Once you have your list and the number of dollars you’re planning to spend on each recipient, add it all up. If it’s too high, refine the dollar amounts on your list and recalculate. Repeat until you have landed in your spending comfort zone.
• Start early. By starting well before Thanksgiving, you give yourself more options. You have more sales to choose from, and you have more time to shop. But starting early gives you another valuable advantage as well: time.
• Make gifts by hand. If you have more time than money this year, making handmade gifts is an ideal solution. Indeed, it’s more than ideal – a store-bought gift isn’t always appreciated for very long. A handmade gift is frequently kept and treasured for a lifetime.
• Send cards. Cards are cheaper than gifts. Cheaper still if you create them by hand. And cheaper still if you give them in person to people you see regularly than if you spend money on postage. Need to save even more on stamps? Scan and email your cards. But personalize each of them so they don’t look like a mass mailing.
• Join a Christmas Club. Back before nearly everyone had a credit card, people joined Christmas Clubs at credit unions. Their credit union would help them set aside money each month for 11 months. Then, at Christmas time, that money was available – with the interest earned – for holiday spending. You can join a formal Christmas or Holiday Club at the credit union, or you can create your own personal Christmas Club simply by adding another savings account and exercising a littler personal discipline to contribute regularly and not dip into it throughout the year. Yes, now more people have credit cards – but they aren’t necessarily better off. Credit cards help with evening out your cash flow over the course of the year. But with credit cards, you pay interest on your purchases. With a Christmas Club or other savings account, the credit union pays interest to you!
• Try alcohol-free holidays. Alcohol adds quite a bit to holiday expenses between Christmas and New Year’s. Rolling back or eliminating alcohol can easily save $30 to $100 (or even more), for some families, between all the holiday expenditures. That’s enough to buy quite a few cards and stamps.
• Keep it simple. Remember – the first Christmas was quite modest. They didn’t even pay for a room at the inn. There’s nothing wrong with a quiet Christmas at home with your family. Indeed, there’s a great deal about that idea that gets it exactly right.