Finance Q&A: How Will We Afford the Holidays?

Dear Deborah,

Every year as it gets close to the holidays, I stress over not having enough money for gifts. It can be a big headache in my life and take away the joy of the season. How can I better plan during the year to avoid this problem? -- Jay

When we choose to emphasize the importance of our relationships, traditions, and the true meaning of Christmas over things, the stress tends to diminish.

How can we make the process easier?

1.  Check and confirm with family members to decide what everyone truly wants to do for the holidays. With so many families needing to cut back on spending, this could be a favorable step for everyone. Some families may decide to draw names instead of buying something for everyone within the giving circle. Others may decide to postpone long distance trips this year to visit extended family members, cutting hefty travel expenses.

2.   Set up a holiday savings account at your bank. Decide what dollar amount of your net pay you want to set aside throughout the year. Save $25 a month and in one year the amount will add up to $300 for gift-giving. Take $50 a month from your paycheck and your savings will be $600. Setting aside funds automatically is a smart idea.

3.   Plan ahead by looking year-round for the perfect gift for family and friends. See if you can make it an enjoyable task. Go bargain hunting when stores have weekly and seasonal sales. As you visit unique shops or art and craft shows, select items with special meaning for the recipients. But don't forget where you stored the presents when it comes time to wrap them!

In the end, decide on the dollar amount that is truly affordable for Christmas gifts and stick with the decision. We don't need to rack up hundreds of dollars on credit cards to make memorable holiday memories.

Copyright 2010 Deborah Nayrocker. All rights reserved. Permission to reprint required.

Deborah Nayrocker writes on personal money management topics, showing others how to take control of their financial future. An award-winning writer, she is a guest contributor with and a finance columnist with

Deborah is the author of The Art of Debt-Free Living and the Bible study Living a Balanced Financial Life.