Frugal holiday shopping and entertaining

There are dozens of ways you can save money and protect your budget while gift shopping. This is especially important during holiday time because most people will be spending money in amounts above their normal budget and they'll be spending that money in places they might not normally shop. It's the responsibility of each of us to be our own smart shopper. With some assistance from Consumer Action, I have brought you this list of suggestions for saving and protecting your money during the holiday shopping season.

Begin with a budget: Spend some time thinking about your holiday expenses. Prepare a budget so you can get a good hard look at what financial stresses you might be in for. Make a list of all of the expenses you plan for the holidays and compare that list against the amount of money that you expect to have available. Trim amounts and make adjustments as needed to bring expenditures in line with income. Now is the time to open those Christmas club accounts for next year.

Pay cash when possible: Buying gifts on credit is dangerous business. Maybe you'll put a smile on someones face as they unwrap what they've received, but that's not an excuse to put yourself in a financial bind. If you were unable to put aside the money for a major gift purchase in one year, how can you pay for that gift and it's finance charges the next year? If any of your holiday purchasing requires a credit card, think twice about it and ask someone you trust for their opinion.

Always comparison shop: These days, it really pays to comparison shop from home before you go out to make your purchases. Start by making a list of the major items you'll be looking for and then make a list of possible sources for those items. Go online, find the websites for your favorite retailers, and search their store categories for the items you are interested in. Once you have found your best prices, it can be a good idea to call and confirm those prices with the store before you hit the road. You may even want to print out a copy of any spectacular bargains you find, just in case the store personnel "accidentally" don't know about it.

Consider the extras: When considering your purchases, don't forget to add in the extras that will affect your bottom line. Shipping, extended warranties, add-ons, and extra options can significantly increase your actual cost well beyond what you expected. These can be the situations when an in store gift card will really pay dividends by restricting your initial expenditure to the item in question, leaving the gift recipient to choose and pay for their own extras.

Be creative: Don't be trapped in the mindset which says you must buy things to give as gifts. For example, these days the perfect gift for my wife to receive would be a full day of baby sitting our two year old by someone she trusts. A teenager could give the gift of washing the car every Saturday for a year, or you could give a close co-worker the gift of buying them lunch the first Tuesday of every month. Think about things you can make and services you can render which will probably mean much more to your friend than just another potpourri scented candle or screw driver set. Remember, the trick to making a gift of services rendered is that you must follow through on your commitment.

Other Considerations:

• Consider car pooling for all your holiday shopping excursions.
• Avoid impulse purchases when gift shopping.
• Make your large holiday meals pot luck.
• Gift certificates are available just about everywhere and they let you limit your spending totals.
• Save all packaging, tags, warranty cards, and receipts until you're certain about outcomes.

These are just a few of the many ideas which can help you stay out of financial trouble when celebrating the holidays and buying gifts. Financial health is the gift you give yourself, and it does no one any good if while attempting to please others you compromise your ability to pay your bills. Give thoughtful consideration to how you will carry out your holiday plans and remember that almost everyone on your gift list would be more pleased to see you succeed than to receive a gift that puts you on the edge of financial trouble.

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