The following is a guest post by Scott Crawford at GoalSpring Financial

Every holiday season, millions of American families swear to manage holiday spending only to wake up to stacks of bills that take months to pay off. Last year, feeling the pain of their credit hangover Americans made paying down debt the top New Year’s resolution. With the economic downturn this year’s pain could be even worse, but with by following a few guidelines, you can avoid the credit hangover.

1. Create a plan.

Know what you can afford and set a budget, starting with a total amount and then working down to an individual amount for each person on your list. Make sure to leave a bit extra for unexpected gifts.

2. Have a conversation with your children to set expectations in advance

If times are tough and you will be cutting back this Christmas, explain your financial situation to your children in advance. Explain that you love them, but that you will have to cut back on holiday spending. Involve them in the process and ask them to help you set priorities. Not only will this give them a stake in the outcome, but it will teach them about finances and prioritization.

When it comes to gifts, consider giving your children a one-on-one date, a day trip, or something special in lieu of a monetary gift. What ultimately matters are thoughtful gifts rather than sheer quantity. With each gift, tell you kids why you selected the gift you did and make sure that it communicates your love and how well you know them.

3. Discuss your situation with others and the impact on your gift giving

If you have a tradition of reciprocal gift giving with your family members or others, talk to them about your situation. See if you can agree on both sides to buy gifts for the whole family instead of for each person or exchange home-made gifts made by the children. Talking about finances is difficult, but you may find that others are feeling the same economic insecurity and will be glad that you suggested money-saving alternatives.

4. Stick to your plan

It sounds obvious, but most of us fail execution rather than planning, so track your spending as you go to make sure you don’t go over. Watch for sales on key gift items, but avoid the temptation of impulse sales.

Christmas is a great time of year and with a little planning you can make it much less stressful. Creating and sticking to a solid plan will get you through the holidays with minimal stress and let you focus on showing your love for your family and friends rather than dreading the bills that come in early January.

About the Author
GoalSpring Financial offers a new approach to debt advice and reduction.

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