Your Guide to Frugal Cheer

Finding it hard to feel festive when all you can think about is that fat credit card bill or those student loans you’re (still) paying off? Unfortunately, you’re not alone: three in four American households are currently saddled with some kind of debt.

So, as we enter a new holiday season — with shoppers planning to spend even more than last year — here’s how to affordably take part in the giving season and keep a lid on debt.

Plan Around Your Real Budget

Aiming to cap your holiday spend at $500? Map out your spending according to that exact figure, not on money you “think” is going to come rolling in. Avoid temptation by sticking to cash and prioritizing your budget.

First, set aside money for folks who deserve nice tips — the babysitter, dog walker, house cleaner, etc. — and buying a few gifts for the kids. Based on what’s left, it may be that your child’s teachers and Great Uncle George will have to receive homemade cookies instead of iTunes gift cards. (And enjoy them more! Maybe!)

If your manager does pull through with a substantial bonus, consider it an extra payment toward an existing card balance.

Find Clever (Cheap) Gifts

With her strict $25 per gift budget, Zina Kumok, founder of the blog DebtFreeinThree, has to employ a little more creativity for holiday shopping. Last year she gave her future father-in-law an inexpensive bottle of wine with an inscripted personal joke on the label (which she designed herself). This year she’s commissioned a talented friend to do a portrait of her parent's dogs for just $15. “I know it sounds cliche, but putting more thought into a gift can make up for a tight budget,” says Kumok.

Sites like Groupon, GiltCity and Living Social are also good sources for some affordable experiential gifts. “I recently gave my my mom a ziplining tour for Mother’s Day, a whale watch for her birthday, and a chocolate tour of New York City last year, all of which were huge hits and very affordable,” says Stefanie O’Connell of TheBrokeandBeautifulLife.com.

A note to procrastinators: If you’re going to adopt this trick, start brainstorming and collecting ideas well ahead of Hanukkah or Christmas Eve.

Give Them Something Priceless — Time

It’s tacky (and a little awkward) to gift your friend, say, $25 in cash. Gift cards — while popular — are also questionable. Presenting her with an hour or two of free time, however, can be done tastefully and offers way more in value. If, for example, your busy mom-of-three girlfriend hasn’t had a Saturday afternoon to herself in months, offer to watch her kids while she does anything she wants — even if it’s just taking a nap!

For another friend you might offer the combined gift of time and a skill such as helping to organize her office or design that blog she’s always wanted to start. Jackie Beck, personal finance author and creator of the mobile app Pay Off Debt, recommends extending this money saving tip to teachers. You could write a letter to your child’s teachers to express your appreciation and offer to volunteer wherever they need you most, she says.

Try a Kids-Only Gift Rule

It's hard to keep your spending in check when your entire family — including third cousins — expect to exchange gifts. At or around Thanksgiving, let them know you’re taking on a new tradition this year and limiting gifts to only certain people, perhaps just the kids. Besides, says Todd Tressider founder of FinancialMentor.com, “It just gets to be too much cost, work, and none of us really need anything anyway.”

By speaking up and proposing this idea, you’ll probably relieve fellow relatives who were quietly feeling the financial crunch, too. “Be honest about your financial constraints with your loved ones and try coming up with creative solutions together,” says Stephanie Halligan of the site Empowered Dollar. While you’re at it, put a cap on the number of gifts you buy your kids, says Tressider. “For our own kids we have started a three gift limit.”

If your family insists on exchanging gifts, suggest a Secret Santa exchange where you only have to buy one gift instead of eight. Or, set a gift spending limit of $10. The most creative gift wins.

Travel Off-Peak... or Not at All

When it comes to saving money on flights during the holidays, avoid peak travel days, says O’Connell. “I travel to visit family...in early December, which lets me save almost $300 on airfare and still spend quality time with them during the holiday season,” she says. According to CheapAir.com, the best days to fly over the holidays include Tuesday, December 23 (if you’re traveling for an entire week, try to book your return flight the following Tuesday to save even more) and Thursday, December 25 (aim for the first flight out to make sure you arrive in time for dinner).

If traveling is beyond your means, offer to play host and invite relatives to your neck of the woods. Or, make plans for a mini family reunion somewhere in the middle at an affordable destination early in the New Year.

Last But Not Least, Get a Side Gig

Frugal living expert Laura Greutman and her husband Mark managed to make it through the holidays in years past, despite carrying $40,000 in debt, by participating in evening focus groups ($70 to $100 per session) and taking surveys through places like Opinion Outpost, Valued Outpost and Pinecone Research. “I would take the surveys at night while watching TV and saved up $300 one year,” says Greutman.

The holidays are also prime time to earn more than usual thanks to more demand than supply. “It allows you to command a higher rate,” says O’Connell. For instance, two years ago, rather than going out and blowing money on New Year’s Eve, O’Connell babysat at a party. “I didn't get to kiss anyone special at midnight, but I left the party at 2am with $300 in my pocket and met up with my boyfriend afterwards.” Other money makers this time of year: house sitting for out-of-town neighbors and running tasks for busy parents.

And if you’re seeking a good excuse to skip some of the holiday happy hours and dinner invitations (which carry price tags of their own), saying, “Sorry, I’ve got to work,” can be an easy opt out.

Farnoosh Torabi is an award-winning financial journalist and author of the new best selling book, When She Makes More: 10 Rules for Breadwinning Women. Earn the chance to win a free signed copy when you join her online community here.

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