Find frugal -- but not cheap -- gifts by Melissa Ezarik
Overspending and the holidays often go hand in hand.
"It's too easy for people to say, 'Oh, I'll just get this one more gift for so and so,'" says Lynnette Khalfani-Cox, known as The Money Coach, and author of "Zero Debt: The Ultimate Guide to Financial Freedom."
"By the time January rolls around and the credit card bills start coming in, those same consumers who were punch-drunk with spending now have the equivalent of a hangover," she says. "Except in this case, it's a financial hangover that's going to last a really long time."
But how about promising yourself a frugal holiday instead? While it's common to associate frugal with cheap, experts say there's a big difference between the two.
"Being frugal means being budget-conscious, getting the most for your money without having to sacrifice your taste," says bargain-shopping expert Karen Hoxmeier, founder of MyBargainBuddy.com. "Being cheap is buying any old thing, regardless of its quality or suitability."
Kim Danger, founder of Mommysavers.com and family savings expert at Coupons.com, has a similar outlook. She says a gift has meaning when there's thought behind it, "not necessarily when it is expensive."
Brad Stroh, co-CEO and founder of Bills.com, says a good general rule is to avoid spending more than you can pay off in a month or two.
"The toys will be broken, one of the cuff links lost and half the perfume used by the time you pay off credit card bills in June," Stroh says. "And the sweet memory of gift-giving will be tainted by bitter interest charges."
Remember that a loved one "isn't going to love you any less because you buy a $30 sweater as opposed to a $300 sweater," says Khalfani-Cox.
"The best antidote to overspending is to figure out why the heck you're celebrating in the first place," she says.
1. Keep an eye on sales It may seem obvious, but store circulars are a great source for holiday bargains.
"Cross-referencing sales and deals between store circulars is critical," says Eva Yusa, who blogs on ShopLocal.com as Eva the Shopping Diva. ShopLocal.com offers price alert e-mails to help know where to shop.
The holiday spending frenzy really begins on Black Friday, the day after Thanksgiving, for a reason: Sales seem to be everywhere. In recent years, retailers have also raked in sales on Cyber Monday. This is the Monday following Thanksgiving, when millions of people return to work and use lunch hours (and mornings and afternoons) to shop online.
2. Surf for savings
It's no wonder that people are shopping online -- no crowds, deals found at a click, free shipping. But it's not just about buying. The Internet allows you to comparison shop without having to visit the mall, a great way to save time as you stretch the budget. There are countless sites that can help you find the best deal, including Buy.com, Overstock.com, PriceGrabber.com, Shopzilla.com and dealnews.com. MyBargainBuddy.com maintains a list of sites with free shipping policies and coupon codes for more than 500 online stores. Danger also recommends subscribing to e-newsletters at your favorite brands' Web sites. That way, you can take advantage of coupons and discount offers.
3. Get to know store policies It pays to shop at stores that match competitors' advertised prices and offer price adjustments.
"If the sale item is marked down within a certain time frame, you might be able to get the better price," Danger says.
Be sure to learn about a store's return policy, in case you find a better deal that you want to take advantage of elsewhere.
4. Give a theme gift
Gift baskets and boxes are fun for recipients and can be frugal for givers. With the many different gift-basket themes nowadays, Danger and Hoxmeier suggest finding a theme or creating a gift basket yourself that matches the special someone who needs the perfect gift.
Danger recommends purchasing baskets and containers at dollar and thrift stores and, when assembling, propping the package up with newspaper. Be sure to hide the newspaper with a lot of shredded colored paper.
5. Buy in bulk
Buying in bulk can often net big savings. Buying more than one of something isn't cheap if the thought behind it is genuine.
For example, Danger suggests using this approach if you're planning on giving several gift baskets.
"Look for items in sets that can be separated, such as a set of mugs for coffee lovers' baskets," Danger says.
As Yusa points out, some retailers allow bulk purchase pricing with items shipped to many different locations.
"This is a wonderful way to save discreetly," she says.
6. Make the thought count
In many cases, simply putting extra thought into your shopping can result in gifts that are cheaper and more personal.
"You can certainly spend less if you get the right thing," says professional organizer Elaine Bloom, owner of A Place for Everything.
For example, Bloom likes penguins. So her friends have given her penguin slippers, chopsticks, towels, cups and a hat. She's even received a penguin bath mat and fondue pot.
Shel Horowitz, author of the e-book "The Penny-Pinching Hedonist," offers some thoughtful suggestions for gifts under $20, including a magazine subscription, craft supplies, well-crafted but inexpensive jewelry, hot sauces or spices, festive party bread or cake, and organic fair-trade chocolate truffles.
Good wine can also be had for less than $20. Jayson Knack, a certified sommelier owns Decanter Wine Lounge in San Diego, Calif., recommends Prosecco, New Zealand pinot noir and Malbec from Argentina.
Or consider giving a treasured heirloom, says Sally Herigstad, an accountant and author of "Help! I Can't Pay My Bills." Grandma's tea set or a framed picture of great-grandma as a young girl are some ideas.
7. Get the family to go frugal
Sometimes, people overspend during the holidays because it's a long-standing tradition in the family. Don't be afraid to break the cycle.
"Speak openly with those you celebrate with if gift giving is getting to be too much," says Barbara Kilikevicius, author of "A Mindful Christmas."
"You may be surprised that almost everyone thinks this part of the holiday is unnecessary," she says.
Ask your family to agree to a per-person spending cap. Or better yet, draw names for a Secret Santa or Secret Hanukkah Harry, says Michael Gold, a Certified Financial Planner at Wachovia Securities.
"Trust me, your loved ones will be relieved that they won't have the daunting task of shopping and spending for so many relatives this year," Gold says.
Buying gifts for an entire family rather than individuals also works.
Bloom suggests collecting money that would be used for gifts and instead spending it to buy gifts for needy children.
8. Handle 'hot toys' with care Too often, the hot toy of today is the forgotten plaything of tomorrow. It's a waste to spend $350 on a Tickle Me Elmo that winds up at the bottom of the toy box in a few weeks, Hoxmeier says.
"Encourage your kids not to fall for the hype," Hoxmeier says.
If your children insist on getting the hot toy for the holidays, try a different approach.
"Tell your kids you will think about getting them the hot toy for their birthday," Hoxmeier says. "More often than not, they will have forgotten all about it by then."
9. Save on your spouse
Agreeing to a low spending limit for your honey can actually be a romantic gesture. "Show your affection not by spending a lot but by being creative in picking the perfect gift within the spending limit," suggests Rob Bennett, author of the daily Financial Freedom Blog at PassionSaving.com.
For example, find an out-of-print book by your spouse's favorite author in a used bookstore for $5.
10. Shop late
Dan de Grandpre, founder and editor in chief of dealnews.com, refers to Dec. 21, 2008, as Last-Minute Friday, the final day you can shop online at most stores and still have gifts shipped by Christmas. Last-minute discounts are expected. And as early as Dec. 21, online shoppers can expect to find after-Christmas sales.
One note of caution: This approach is not without a downside. Wait too long and your procrastination could force you to pay exorbitant shipping fees to get the gift to your loved one on time. So, as with the stock market, remember that the rewards of last-minute shopping sometimes come with increased risk.
11. Give of yourself
Daisy Reese, co-author of "True Self, True Wealth: A Pathway to Prosperity," recommends giving gifts that are emotionally rich. Themes and examples include:
Sentiment -- A personalized "ancestor album."
Wisdom -- A notebook of recipes from the recipient's childhood.
Connection -- Time for baby-sitting or help planting a garden.
Memories -- A holiday cookie-baking tradition.
12. Think ahead
Renee DeGross, a former retail business reporter and columnist for the Atlanta Journal-Constitution, collects holiday presents year-round as she finds deals. She has purchased French Laguiole spreading knives for $10 at Marshalls -- she says "they sell at Bloomies (Bloomingdale's) for three times this price" -- and $100 worth of gifts for under $10 in the Lands' End department at Sears.
Gold advises preparing a budget now for next holiday season. Take what you spent this year and inflate it by 2 percent or 3 percent; then, divide that number by 12 months, set up a separate account, and have that amount automatically deposited into that account.
"Come December 2009, you have your holiday money," Gold says.
There is another benefit to thinking ahead and taking the time to budget -- it makes it easier to enjoy the money you do spend, notes Mikelann Valterra, director of The Women's Earning Institute. Valterra advises everyone to use a five-step plan when planning a holiday budget.
Planning your budget:
• List everyone you are planning on gifting.
• Brainstorm gift ideas for each person and assign an amount of money you are thinking of spending on them.
• Add up all potential gift amounts.
• Brainstorm other holiday costs, from decorating and entertaining to travel and charitable giving.
• Add the amount of your other holiday costs to your gift amount and then step back. If you are uncomfortable with this amount, go back over your list and trim it.