Sticking To Your Holiday Budget

With the economy in crisis, many Americans are already scaling back their holiday spending. Stephanie AuWerter, Editor of SmartMoney.com, has some tips for saving money this season.

Experts are predicting that most consumers will have a modest holiday season this year. It's important to stick to a budget, but be realistic when you're putting one together. Try to keep your spending in check. "Santa is on to something - make a list and check it twice... Track all of the extra expenses that go along with the holidays," says AuWerter. Holiday spending isn't just about presents; it's about travel expenses, party clothing and special dinners too. Be sure you take everything into consideration before you start shopping.

First, consider your travel expenses. If you haven't purchased your tickets yet, you're not out of luck. However, AuWerter says to keep in mind that there will be roughly 11% fewer planes flying this year. "If you want to travel, particularly during those peak travel times, you should book now," she says.

Thankfully though, with the slowing economy, air fares haven't increased much from last year. Demand for tickets is weaker than usual. "We aren't going to see a huge hike, but you do want to look out for these extra fees that airlines have," says AuWerter. Everything adds up. Keep in mind that you'll probably have to pay to check your luggage; some airlines are now charging fees for food onboard. Factor these prices into your airfare total to see if you're really getting a good deal.

If you want to save some money on holiday shopping, start looking for sales now. Many retailers are starting sale promotions earlier than ever in an effort to boost their numbers. "We're seeing a 10% greater volume in discounts right now than we did a year ago," says AuWerter. Many of these sales are aimed at grown-ups because during tough times, parents tend to spend money on their kids - not on themselves. Look for sales on things like adult apparel. Shopping on the sale racks can really save you some money this season.

Or, have holiday fun without spending any money. "Come up with a new tradition that involves spending time together, but not money," says AuWerter. Sing carols, make homemade decorations with your children out of household items or have an annual family talent show. Keep in mind that it's the memories that last longest, not the gifts. A huge family snowball fight in the yard can forge memories that will last a lifetime.

When you do have to pull out your wallet, try to pay in cash only. Or, put your credit cards on a freeze - literally. Place them in a plastic zip-top bag filled with water and put them in your freezer. If you can help it, don't thaw them out until January. "2009 is likely to be a little bit tough, so you really do want to start on firm financial footings," says AuWerter. If you make some smart financial moves now, you can start off the new year on better ground.

For more information on sticking to your holiday budget, as well as other personal financial advice, click here to visit www.SmartMoney.com.

By Erin Petrun