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Holidays Without Debt

Avoid overspending in the middle of this Season of Greed? That seems as likely as not overeating at a mile-long dessert buffet! Stay true to the real spirit of the holidays by sticking with our easy-to-follow tips for a debt-free -- and carefree -- season. So read up, slow down, and save big. It's a great way to end the year -- and start a new one.

1. Wish Lists

We always ask our children "What do you want for Christmas (or Hanukkah)?" This year, ask them a different question: "What would make the holidays extra special for you this year?" Sure, someone's bound to answer "Play Station 2" without missing a beat, but follow up with, "What else?" Eventually, most kids will ask for things like a chance to bake cookies with you, or make a snowman (sure, that's a gift of your time, but one you can well afford to give if you subtract even an hour from a shopping trip at the mall).

2. Gifts

Give one big and one small gift per child. Do children need 20 gifts each? Do we need to scratch our heads and think long and hard about this one? In fact, limiting gifts gives kids a chance to think about what they really want, and encourages parents to make better choices in stores. Plus, the fewer things children receive, the more they appreciate them. (Don't worry about your kids' reactions if this constitutes a major change in your family's holiday routine. It will teach them a lesson in flexibility.

3. Entertaining

Focus on activities, not food. You'll save a bundle -- and probably have more fun -- if you turn that dinner party for 12 into a tree-trimming or menorah-lighting party with hot mulled cider and cookies. Or, since booze is a budget-buster, invite family and friends for a potluck holiday brunch instead of cocktails and canapés.

4. Pay Bills Early

When paying your December bills, some financial advisers suggest paying 20 percent more than the amount due for utilities and other monthly items. That way, you'll be a little ahead of the game in January, rather than feeling totally depleted after the holidays.

5. Think Price First

Consider price first, gift item second. Consumer surveys show that few among us actually make and stick to a holiday budget. Too bad, because budgeting is the best way to avoid overspending. The second best way is to make a mental list of how much you want to spend per person. Then find a gift in that price range.

6. Non-Material Gifts

Does your cousin really need a new scarf? Does your aunt really want more bubble bath? If you can, ditch gift-buying for friends and members of your extended family. Instead, give "holiday IOUs," good for free delivery of a simple supper on a cold night, or a child-free weekend (my cousin and I take each others' children so each of us can get away with our husband for a weekend every winter.)

7. Trash the Catalogues

Throw out those catalogues (before you look at them.) This is a great suggestion from Juliet Schor, Harvard economist and author of The Overspent American. Catalogues create desire for things we didn't even know we wanted, so toss them in the trash and save a bundle by getting that fleece bathrobe at a discount store. Think what you'll save on shipping!

8. Homemade Paper

Make your own wrapping paper. Nope, we're not suggesting a big, time-consuming project here. Just buy a roll of white paper, the kind used for kids' art projects, and invite children to decorate with whatever you already have on hand (markers, stickers, paints, stamps -- store-bought or carved from a potato -- and ink pad). This is a great project for younger siblings to do while their older brothers or sisters are doing homework.

9. Recycle Old Cards

Recycle old Christmas cards and gift tags. My grandmother did this (didn't yours?) Simply cut the card in half and use the pretty picture to tag your presents.

10. Plan Now For Next Year

This suggestion from Steve Rhode, president of a Maryland-based credit counseling service: "In January, you'll know how much you spent at Christmas. Divide by 12 and save that month every month and you'll have enough for next year without having to fall back on credit cards."

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