Editor's Note: Do you have a question about your finances? Crosswalk.com welcomes financial columnist, Deborah Nayrocker. Deborah will be answering selected readers' questions in her monthly column. To submit your question, email us at: moneyquestions@crosswalk.com.

Dear Deborah,

Q: I'm not looking forward to the holiday season ahead. My husband is self-employed and his business is barely surviving. My children have come to expect lots of presents from us. In the past we probably spent more than we should have, putting most of our purchases on credit cards. We can't afford to spend on presents like we use to. Any suggestions? -- Karen

A: Too many families get into financial trouble because they continue to live as if their  household income has not changed. They are not used to living on a budget, and many people feel entitled to things they can't afford. To maintain their usual standard of living, many families are depending on credit cards. In the long run, they are making their situation worse.

According to economist Elizabeth Warren, 50 million Americans are not able to pay off their credit cards at the end of the month. They will continue to have money problems as long as revolving debt is carried from month to month. And if they don't learn to stick to a budget and pay down their debt, they are inviting a lifestyle of continual consumer debt.

Karen, if you haven't done so yet, talk with your children and find out what they are thinking about the economy. Your children are probably aware that times are tough. They may have already observed that your household budget is tighter.

Consider your children's maturity levels when discussing your family's financial situation. As you ask questions, build on what they already know about the economy and your family's circumstances. Younger children don't need to know all the details.

Inform them that you have a plan to get through the present situation. Discuss some temporary changes that might take place in your lives. Explain that since there's not as much income this year, you'll need to cut back on spending during the holidays. If cutting back means changing expected family traditions, let family members know.

During the holiday season focus on memorable experiences you can share together, rather than the number of presents under the Christmas tree. You don't need to spend a lot of money to show your children you're thinking about them and appreciate them. Children often value time spent with them and happy experiences more than things.

Calculate a Christmas spending budget and buy what you can afford with cash. When deciding what to buy for your children, choose items they tend to talk about more, or choose a few gifts from a list they've made. Stay within your spending limits and resist the urge to charge your purchases. You'll be glad you stayed in control of your Christmas shopping. 

November 9, 2009


Deborah Nayrocker is the author of The Art of Debt-Free Living - Living Large on Less than You Earn and Living a Balanced Financial Life. Her Web site is www.artofdebt-freeliving.com