Does the Holiday Season put a Drain on Your Resources

Is the Holiday Season a Drain on your Resources?

The financial hangover that awaits those who are not responsible during the holidays is legendary. Unless you have budgeted for holiday expenses, chances are that you will be caught spending more than you anticipated. In addition to the recession we are currently experiencing, with hiked interest rates and unprecedented unemployment, being reasonably frugal in the holiday season will result in a more peaceful financial year.

The best thing to do, of course, is set aside money throughout the year. Saving up money to spend it later is definitely the way to go. However, if you have little money to spare throughout the year, this isn't an option. You will have to look for less expensive ways to celebrate the holidays.

If you have travel obligations far away from home, consider not traveling. It will save you stress as well as a huge chunk of money. The same goes for hosting; having people stay at your house is also expensive, but not as expensive as renting a hotel, airfare, and a rental car. If you can save money this way, do so.

In some families and circles, extensive gift giving is expected. If you find yourself in this situation, you should openly and frankly discuss paring down. Don't point fingers or place blame; simply explain that you can't afford to give high-dollar items. Agree on a price limit and don't exceed it. Also, if there is a $50 cap for example, don't feel compelled to get everyone a gift that is $49.99. If the perfect thing for someone only costs $25, that's okay. Gift giving should be more about the sentiment than the price.

In addition to less expensive gifts, you can pare down the number of people you give gifts to. Is it necessary to give gifts to everyone in your department? Would a heartfelt card do just as well, or a burned CD of your favorite holiday songs? What about extended family that you only see at Christmas, and can't think of anything better than an Amazon gift certificate because you don't know them very well? For gifts such as these, it might be better to politely bow out. If someone still insists on giving you a gift despite a family agreement that you won't, don't feel guilty. It was their choice to still give you something. Write them a thank-you note and consider it done.

Another option is homemade gifts. If you know how to knit, you can easily knit scarves for people. Another option is food – if you can bake holiday breads, gifting loaves of soda bread and other inexpensive items are an excellent gift. It far outweighs giving someone a knick-knack that they need to store.

If you have high-interest debt left over from previous purchases, don't continue to put more on your credit cards. Also, don't bury your head in the sand. Debts won't go away if you pretend they don't exist. Instead, see if you can find a 0% balance transfer card. These are becoming harder and harder to find as the years of easy credit have dried up, but if your credit is good to begin with, you should still be able to find one. Transfer your high interest debt to the 0% card, and pay off that money as soon as possible.

For more interesting articles on budgeting and much more please visit the personal finance section on GKBuiness.