Over the years, some would say that I have become quite cynical about the holidays, primarily due to the financial toll that the holidays can take on your finances. There are these social expectations that are really difficult for those who have a tight budget. It is possible to easily spend hundreds, if not thousands, during this month of festivities, between gifts, social outings, decorations, food, and travel. Unless you have saved up all year long to prepare for the holiday season, this presents a serious problem.

In the past few years, I have really had to determine my priorities and cut down on much of my holiday spending. I normally do not purchase new decorations or put up a ridiculous amount of lights that will jack up my electric bill. I skip most abnormal cooking efforts, and if I do bake, I choose 2 or 3 items to make at the most and give to others as gifts. I make sure that I spend very little, if anything, on my holiday cards. I have had to reduce my holiday gift list and the amount spent. I guess you could say that I am bucking tradition in many ways, but I like to think that I am maintaining control over my finances in spite of the holiday season.

Here are some ways to maintain control of your financial situation even during the holiday season:

1. Bills Come First—It may be tempting to put aside other financial responsibilities due to the impending gift-giving holiday, but don’t do it. Make your bills and routine financial responsibilities first priority and let all other endeavors wait until you make sure that you have taken care of the most important things.
2. Minimize Reliance on Credit—It is commonplace to hear about a rush of credit card bills that come in after the holidays. Unless you know that you will have the money to pay them off immediately, it may be better to resist the urge to charge it. Definitely avoid any pay day loans or similar types of short-term high interest loans. If you absolutely must rely on “credit,” borrow from your own savings and pay it back immediately, although even this tactic is questionable unless you have saved up money for this purpose.
3. Set Limits and Keep Them—While making sure that you have money for your regular bills and avoiding unnecessary use of credit, set some spending limits for the holiday season and then keep them. Eliminate parts of your holiday budget that are less important to make room for those things that are more vital.
4. Christmas is Not a Ticking Time Bomb that Must be Diffused—Remember that gifts can still be given after the holiday. If you cannot afford to get all of them prior to Christmas, don’t be afraid to make them a little belated if it means that your budget will be in better shape.
5. Avoid What You Cannot Afford—Learn the “simple” art of restraint when it comes to spending. If you do not have the money, don’t do it. Just like I would not go on a summer vacation if I cannot afford it, I should not travel at the holidays if I do not have the money. Ignore the pressure of it being the holidays and determine what your budget can handle. Avoid pressure-based spending that will reap negative results in the near-future.

The holiday season places additional emphasis on spending and makes it increasingly difficult to keep your budget in check. However by learning to show restraint, determine priorities, and reduce peer pressure, you can protect your budget from busting during the holidays. When you learn to “just say no” throughout the holiday season, your financial outlook will be much brighter going into the New Year and beyond.

How do you combat holiday season pressure to spend? What tactics do you use to keep your budget in balance during the holidays? Please share with us so that we can learn from you.