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Save Like Scrooge as Holidays Approach

BankingMyWay.com

By Peter McDougall

The struggling economy is making it harder for consumers to get into the holiday spirit.

Families are looking to cut back spending this season, and consumer confidence, although up slightly in November, is still near historic lows. But how can you save money without skipping on giving gifts entirely?

Here are a few tips to save like Scrooge yet still give out some holiday cheer.

Have a family chat

If you haven't already, consider having a discussion about family finances. In particular, talk to your kids about how and why things need to be a little different this year. You may be surprised at how much they know about ongoing financial problems, and how willing they are to help out. The conversation doesn't have to get into depressing details. Consider treating it like a learning opportunity about personal finances, such as setting a budget or establishing savings goals.

Also consider discussing a change in gift-giving this year. A secret Santa or Yankee swap approach, for example, can help you save money by reducing the number of gifts to buy.

Develop a gift budget

A budget can help you stay on track through the next few weeks of holiday shopping. Start by listing the people you plan to buy gifts for and how much you can afford to spend this year. Allocate an appropriate amount per person, and keep tabs on your spending as you buy each gift. This can help avoid spending too much on one person -- or spending too much, period.

Set priorities

The holidays are supposed to be about giving, but that doesn't mean giving family members everything on their lists. Quality over quantity should be this year's motto. With budget in hand, consider asking family members to whittle down their lists to a few key items. Involving them in the decision between getting the latest gaming console or new skateboarding gear can help avoid disappointment when gifts are unwrapped. And for the surprise gifts, consider toys that will engage your kids' imaginations instead of just entertaining them with bright lights and loud sounds: For some advice on weighing the pros and cons of various toy types, check out this guide from a national group of early-childhood professionals.

Shop online

The post-Thanksgiving retail numbers are in, and reviews were decidedly mixed. That means you can expect lots of sales in the near future as retailers move inventory and try to catch the eye of increasingly budget-conscious consumers like you. Your best bet to finding discounts? Let your fingers do the shopping. You can compare prices more easily online, and many Web sites are offering free shipping and deep discounts. (Look for coupon codes on sites such as RetailMeNot.com for additional savings.

Avoid expensive sales

While shopping online may not have the same feel as walking through the mall, it can help reduce impulse buys. And nothing promotes impulse buying like a "50% off" sign on an already expensive item. Brick-and-mortar stores will often advertise sales in flyers and newspaper inserts, so just be sure you were planning on buying the advertised item in the first place. (Even if a sweater is advertised at 50% off, you shouldn't buy it if it breaks your budget.)

For other great deals, pay attention to the news. Companies such as Circuit City(CC Quote) and Linens 'n Things that are going out of business are likely to offer fire-sale prices. (Just be aware that at most of these stores, all sales are final, meaning no exchanges if you end up getting the wrong item.)