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How not to go broke during the holidays

One way to save money during the holidays:

One way to save money during the holidays: For gift exchanges with colleagues or family, cut costs by choosing one affordable item to buy or make. Photo Credit: Getty Images/iStockphoto / Sadeugra

December’s gift exchanges and ugly-sweater soirees can make the pressure to spend feel inescapable. Your frustration is likely to mount if you’re cash-strapped, saving for a big goal or trying to pay off student loans.

Consider ways to dramatically reduce gift-related costs, like drawing names instead of buying for everyone, or agreeing to forgo gifts in favor of a group activity.

The following tips can also help you give presents — and even host your own holiday bash — without spending more than you can afford.

Shop smarter

  • Buy in bulk: For gift exchanges with colleagues or even some family members, cut costs and stress by choosing one affordable item to buy or make in bulk. Product-research website The Wirecutter lists 10 low-cost gift ideas, including gourmet olive oil and movie tickets. Or you can give out baked goods in glass jars, purchased in bulk and customized with printed labels.
  • Go with experiential gifts: Providing an experience or service can be more personal — and cheaper — than a traditional gift. For instance, give an annual membership to a local museum. Pick a small or quirky institution in town that fits your friend or family member’s interests.

Host more creatively

  • Share the costs: Potlucks are an easy go-to so you’re not cooking a huge meal for a gaggle of guests. Spice up your potluck by choosing a theme: Ask everyone to cook their favorite holiday dish from home or something inspired by a holiday movie.
  • Focus on the fun: Skip the expensive food and drink prep and invite your guests over for a group viewing of a holiday- or winter-themed movie. Or make it an at-home karaoke party using YouTube videos or cable channels that show lyrics on screen. A popcorn bar is a cheap snack option: Set out a big bowl and have your guests add toppings such as melted butter and cinnamon, Parmesan cheese and dried herbs.
  • Choose a signature drink: For a cocktail party, you don’t need to provide a smorgasbord. Offer a signature cocktail by the pitcher or a big batch of punch with holiday-themed ingredients like mulled cider or wine.
  • Hit the dollar store: Your local discount store is the ideal spot to buy napkins, decorations, cups and plates. Take a spin through Pinterest for inspiration: You can decorate doorways with draped plastic tablecloths, use wrapping paper as a table runner or make a tiered party tray from spray-painted plastic plates and candlesticks.

Know your spending triggers: When you’re shopping for others, you might be tempted to pick up things for yourself or spend more than you planned on each person. Put up psychological barriers to combat impulsive spending. That could mean using cash to buy holiday gifts. Or shop online if you’re the type who can’t resist buying that impossibly soft sweater at the mall.

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