By Irene Dominguez (ACCION USA Consultant) 
Holidays bring joy, but also financial stress.
This year proves to be especially challenging with the high number of families who find themselves out of work or trying to bring down their household debt. You will most likely need to spend on gifts, parties, decorations, travel, etc. However, it is possible to approach the season with a touch of frugality and still be able to enjoy the festivities of the holidays. To ensure a frugal behavior this year, we suggest you follow our "rules" below...
Rule #1: Make a list... and check it twice!
There is no substitute for sitting down with a pen and piece of paper, and making a list of those who you would like to give something to. Try to limit your gift-giving to family and close friends. Categorize your list in three groups
- those whose gifts you absolutely need to go shopping for
- those who you can give home-made goodies
- those who you can send a personalized holiday note or card --or, even better, an e-mail, saving on paper and postage.
Time will also allow you to start saving some money in advance!
Rule #2: Give yourself time to get inspired and creative.
Starting your list early in the year has many advantages. Not only will you avoid buying on an impulse and spending more money at the last minute, but you will also give yourself time to be creative and start working on home-made gifts for people on your list. Creative gift giving will help you stay well within your holiday budget and it can also add to the spirit of the season! You can make things like scarves, potpourri, candles, or sweets. There are many useful links on the Internet, and these are some of them:
Frugalvillage.com - On this website you will find general ideas about how to save money in the household in general, and you can also find some good ideas on inexpensive creative gifts.
Getcrafty.com - A website where people who do crafts post their links and share their ideas.
Pioneerthinking.com - This is a website full of ideas for better and wiser living, and it includes a section on how to make some beautiful crafts.
Rule #3: Put together your holiday budget and make a firm commitment to it.
Once you have made your list and you have a good idea of what you will give to each person, you can put together your holiday budget. This is a crucial step in your holiday plan, so be thorough. Make sure to include holiday meals, wrapping paper, plane tickets, holiday cards, etc. in your budget. How do these expenses compare with the amount you feel you can safely set aside for holiday expenses? If you don't think you can afford as much, think about areas in which you can cut back. If you have a large family, consider having a "family gift lottery", where you enter the names of family members into a hat, and stick to your designated family member when gift shopping.
Rule #4: Leave the credit cards at home!
During your holiday shopping, avoid using credit cards at all costs - LEAVE CREDIT CARDS AT HOME! Take only the amount you intend to spend, in cash. When you use credit and you don't pay the balance in full at the end of the month, you end up paying interest on the amount you charge, which could end up costing you big bucks in the long run.
Rule #5: Do not open store cards
Many people find that their credit score goes down in January, and the dip in score is usually due to two reasons:
- High balances on their credit cards (when they have used credit, which we don't recommend!)
- The amount of inquiries in their reports is relatively high. During the holiday shopping season, stores encourage you to open a card with them, and in exchange they will give you a discount. If you open several new cards in a short period of time, this will cause your credit score to drop.
If you follow all these "rules", you will thank yourself when January comes and you start 2010 with full control of your finances. We wish you a happy and financially healthy holiday season!