Stop the holiday spending carousel

In our wistful imaginations, the holiday season is a simple, joyful time of snowfall, sparkling trees, and soft candlelight. However, in 21st century reality, it is a carousel of stress and spending. Think about it: You put off shopping until the last minute. Then, frazzled and anxious, you hit the malls, laying out big bucks on "obligation gifts" while trying to forget the credit card bill that will be arriving in January. As you sit fuming in a crush of traffic, you wonder, 'Where did all the joy go?"

"From a personal finance standpoint, the holiday season has become a nightmare," declares financial planner Diane McCurdy, author of How Much Is Enough? Balancing Today's Needs with Tomorrow's Retirement Goals. "Somehow, we've come to think that we have to spend and spend and spend every year, and few of us can truly afford to do so. If you're going into debt to buy frivolous gifts for each one of your 18 nieces and nephews, something's wrong."

McCurdy--citing statistics that maintain the typical American is spending 130% of his or her disposable income--claims holiday splurges are not so much the problem as they are a symptom of our society's lack of financial self-restraint. For too many of us, the holiday frenzy yields an unhealthy and often paradoxical mix of entitlement ("My family deserves a great holiday") and resentment ("1 can't believe I have to drop $250 on groceries and spend all day cooking again this year").

The good news, though, is that it does not have to be this way. Armed with a realistic budget and the desire to change, you can get off the holiday carousel and actually enjoy the season. Here are a few of McCurdy's suggestions:

Make a spending list based on hard numbers, not emotion. Budgets are a necessity, so delve into your money attitude, identify your personal pitfalls, separate your wants from your needs, and chart out a realistic financial road map. "Look at holiday preparation as a time to get a better handle on your overall finances," McCurdy urges. "When you have some hard numbers in front of you, you'll be much less likely to overspend out of guilt or desperation or just simple ignorance of how much you've already spent."

It is okay to break your holiday spending tradition. However, warn your family in advance. If you decide to alter your usual holiday pattern, send out a mass e-mail, make some phone calls, or have face-to-face discussions well before the big day. "It's fine to say to your extended family, 'Money is a little tight this year so we're going to make a small donation to our local animal shelter in lieu of buying gifts for everyone,'" notes McCurdy. "You might find that everybody breathes a big sigh of relief and says, 'What a great idea!' Just don't spring it on them after they've already spent the usual $150 on your family."

Respect people's differences. Do not impose your thrifty new values on others. Once you have expressed your intention to have a pared-down holiday, let it go. If Aunt Sylvia wants to throw her usual big, glittering party complete with three Christmas tree gourmet meal, and a mountain of perfectly wrapped gifts, do a way to talk her out of it--but do not feel obligated to reciprocate. Do not cave under the perceived pressure to follow her lead. "Some people truly love the shopping, decorating, cooking, and gift-giving ritual," observes McCurdy. "If you love it, and can afford it, go for it! I'm speaking to the silent suffering majority who dread the spending and stress of forced holiday merriment"

If your extended family .wants to cut back, suggest some money-saving ideas. Draw names or set a price limit or settle on a gifts-to-kids-only policy--or do any combination of the three." "You may even decide as a group to forego gift-giving entirely," entreats McCurdy. "That's fine! Just be sure to come up with some activity to replace the annual gift-opening ritual. Break out a board game or go ice-skating or spend the afternoon working at a soup kitchen. If you don't plan something, the day may feel strangely hollow."

If you are hosting the holiday feast, make it a potluck event. There is a lot to be said for having extended family under one roof during the holidays but, if it is your roof, the stress and expense can override the fellowship. Unless you really thrive on playing hostess, spread the work (and the cost) around, advises McCurdy. "Have everyone sign up to bring a dish or a drink, and when dinner is done, put on some holiday music and give everyone a clean-up task"

Think edible, biodegradable, readable, or homemade. Most of us suffer from Too Much Stuff Syndrome, McCurdy contends. When buying presents, do not contribute to the recipient's clutter. "Most people appreciate gifts like a nice bottle of wine, a beautiful candle, or a good book. These generally are inexpensive and won't be shoved in a closet somewhere. Creative homemade gifts can be delightful, too. Consider giving a coupon for some service you'll provide, like car-washing or babysitting. The gift of your time can be the best gift of all."