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How to Not Go Broke This Holiday Season

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Money expert Jean Chatzky tells us how to survive the holidays without going into the red.

woman paying at cashier

"With unemployment at 10.2 percent, many people are wondering how they are going to be able to afford the holidays," says financial guru Jean Chatzky. But with a little planning, it CAN be done, she says. Here are her top tips.

• If you are going to charge gifts on your credit card, make sure you can pay them off no later than February. Otherwise, use cash or a debit card.

• Look at your finances. Is there anything you can cut back on in the next month to offset holiday spending?

• Make a holiday budget. It should be 1 to 1 1/2 percent of your annual take-home pay. (Go to my website to try out my holiday spending calculator.) Expect that you will go over the budget, just like you would on a home renovation. And be sure to factor in the cost of wrapping paper, entertaining, and holiday foods -- that's all part of it.

• Raid your kids' gift card stash. My kids are constantly getting gift cards for this or that, and I stockpile them -- especially if they have ten or twenty dollars left on a card they've already used. They never even notice when I spend them!

• Buy a gift for the whole family instead of gifts for each individual person.

• Give the gift of yourself in less expensive ways than you have in previous years. Bake cookies or brownies, or give babysitting coupons.

• Small local charities are really hurting this year. Give a donation in a friend's name. When they receive a card letting them know you've made a donation, they won't know HOW MUCH you gave.

• If the one thing your kid wants most is out of your price range, see if you can get Grandpa, Grandma, or even aunts and uncles to pitch in. Kids are feeling the stress too this year -- so if they get that one "big" present on their list, it will really mean a lot.

Click to buy Jean's book, Pay It Down!

Read more tips for super savings this holiday season!

next: Tiger, Three Strikes and You're Out!
9 comments so far | Post a comment now
PlumbLucky December 3, 2009, 12:28 PM

You STEAL your kids giftcards??????

fran December 3, 2009, 1:38 PM

Seriously?!?stealing from your kids? I remember hating it when my parents said they “deserved” the money i got for birthdays…Don’t steal from your kids.

Anonymous December 3, 2009, 2:07 PM

You DON’T have to buy for every family member; that’s how people get in debt. Cut back.

Renae  December 3, 2009, 7:27 PM

O come on don’t take your kids’ gift cards that’s just mean. I’m not that hard up for christmas gift money…

gbmonkey December 3, 2009, 8:56 PM

What about traveling expenses in that holiday budget. Taking money from your kids to buy presents is ridiculous i could see if you really really needed it for food or toilet paper but not for holiday gifts. if it came down to that then people are just going without.

Teresa W. December 15, 2009, 1:20 PM

I’m sorry, I wouldn’t be able to take the kids gift cards either and our kids would notice if we took them because they are as broke as we are. Shopping at the Dollar Store and making gifts for people is a good way to keep within a limited Christmas budget. The holiday is about family and love and being together. I think taking the kids’ gift cards sends the wrong message.

Anonymous December 15, 2009, 1:20 PM

HORRIBLE!! Don’t “raid” your kids gift card stash!!!! I also remember my mom saying that she deserved my birthday or Christmas money because it cost money to raise me!! Don’t ever take the kids gift card money or any money for that matter! How about actually taking your kids to use the “gift card stash” once in awhile and then your kids can write a thank you card to the person that gave them the card and let them know what they bought!!!

L.F. December 15, 2009, 8:53 PM

I rarely got gift cards growing up—checks were the big thing, and that money went straight into my savings account.

My parents never said they deserved my b-day/holiday money. If things were tight, it was not big deal if they’d spent my gift certificate balance.

We buy any leftover balance from our teen when they’ve purchased what they want with a gift card (provided that it’s something we’d use). They get change, and we have something tucked away for our own use.

organic acai May 8, 2010, 4:03 AM

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