Ten Tips for Surviving the Holidays During the Recession

The bad news is that we are in a recession, and it's time for the holidays. The good news is that retailers, e-tailers, and grocery stores are competing for your very tight dollars - and that means savings for you! Following are ten tips for surviving the recession during the holidays.

1. Make and Stick to a Budget

Whether it's gift giving, planning for a dinner or party, or traveling to grandma's house, make a budget during this recession and stick to it.

Figure out where you can cut expenses over the holidays. Is that cable TV really necessary? Are you keeping your thermostat set to 68º or below? Can we eat at home instead of at a restaurant?

Get a budget worksheet and start keeping track of what you spend. If you can't sit down and list things every single time you buy something, make a note on the receipt and throw it into an envelope or letter holder. Then when you have a few minutes, sit down and review everything at once. Staying organized and on track during a recession is vital, especially over the holidays.

Get a Monthly Spending Worksheet here. After you have an idea of what you spend each month over the holidays, use the Build a Budget Worksheet to create a budget. Complete the budgeting process by simply filling out this easy form. Setting up a budget may take awhile if you haven't done it before, but the few hours you spend doing it will pay off in the long run.

2. Review Your Credit Cards

Make it a goal to pay off your credit cards while we are in this recession. Start by transferring as much debt as possible from other credit cards onto the card with the lowest interest rate. Call the credit card company and ask for a reduction in your APR. Don't close credit card accounts. Cut up the cards, yes, but don't close them. Doing so will adversely affect your credit score.

Last but certainly not least, use cash to buy things over the holidays! Don't charge any more until this recession is over.

3. Don't Quit Your Job

Unemployment rates are on the rise. No matter how much you detest your job, it is better than no job at all during the holidays. Stick it out until at least after the first of the year. Then if you feel you just have to quit or go insane, be sure you have another job lined up to go to first.

4. Shop thrift, discount, consignment, and second-hand stores in your area.

Whether you are shopping for clothes, gifts, household items, or decorations for your home, these kinds of stores are hard to beat. If you look through the racks a little, you can find nearly new clothes for just a couple of bucks. Holidays are the time to give gifts, and even during a recession, people still want to give (and get) a little something.

5. Decorating for the Holidays

Use whatever ornaments you already have and buy a few new ornaments from a dollar store to spark things up. For the holidays, get a few dollar-type store holiday hand towels. The little extra touches help keep spirits up over the holidays during a sometimes-depressing recession.

If you don't already have a table centerpiece, make one from decorative sprays, pinecones, and candles you pick up at a dollar store.

Buy some candles - lots of candles - from a dollar store and place them strategically around the house. Use scented candles to give your house a holiday aroma. Simmer nutmeg and cinnamon or pumpkin spice over the stove to give your house a great aroma during the holidays. Recession or not, this extra touch costs practically nothing and gives your house a warm holiday atmosphere.

Last, play some soft Christmas songs in the background. You don't hear them except at the holiday season, so hearing "Silent Night" and "Deck the Halls" will bring back the warm fuzzy feeling you get at Christmas.

6. Shopping for Gifts During the Holidays

First, decide what to spend - whatever will fit into the budget you should have already worked up by now. Nobody need suffer, least of all the kids. After you decide what to spend, make a list of gifts that fit into that budget. (See my article "Cheap Toys Under $10 for Christmas 2008".)

Second, do some comparison shopping before you buy. Some of the most popular comparison shopping websites are Pricegrabber, Nextag, and Bizrate. There, you can find the best prices for whatever is on your list.

But don't stop there! Use coupons, discounts, and special offers to lower your costs even more. Check your local Sunday paper ads online at SundaySaver.com or SalesCircular.com. SalesCircular.com even has "free after rebate" items! Now that's a great holiday deal at any time, much less during a recession!

When possible, combine presents during the holidays. If you are buying for a family or someone else's five kids, pick one gift that they all will enjoy, such as a board game or framed picture.

7. Coupons, coupons, coupons!

I can't say enough about the great coupons, coupons codes, and freebies that are available over the holidays. Remember, everyone is competing for your dollar. Think of finding, printing, and using coupons as a game. Compete with yourself and try to save more this week than you did last week.

AC's Content Producer Crystal Ray wrote a great article about the best sites to get coupon codes. She has some great tips, so be sure to read the article. More coupon and rebate sites are listed below:

1. Ebates.com gives you a $10 gift card for just signing up on their site - no obligation, no strings attached. They offer cash back and coupon codes for all kinds of purchases in 1000 stores. Additionally, Ebates will give you cash back every 3 months for items you purchase through their site (major stores and brands plus travel).

2. One of the most impressive coupon sites I found is The Grocery Game. They will give you coupons according to your area code. Many are free, but for a nominal fee ($1 for the first four weeks) you can get a customized shopping guide for your area. Take a look at this receipt - the founder of the grocery game saved 90% off her grocery bill!

3. Money Saving Mom offers coupons by area code. Read the section on using CVS coupons. This program also applies to Walgreen's. Once you learn how to work the easy CVS Extra Care Buck system, it isn't unusual to get $15-$50 worth of groceries and household items for $1.

4. Smart Source has lots of recession-busting grocery coupons.

Once you have all of your coupons together, go shopping. If you see a non-perishable item on sale that you know you will need for a special dinner a month away, buy it right then. If you have some great coupons, stock up on staples. Shop Winco or other bare bones grocery stores for non-sale items.

8. Do All Your Shopping At Once

This may seem like an enormous task, but it's worth it for a couple of reasons: 1) By not making numerous shorter trips, you save gas money; and 2) If you are shopping online, you save in shipping costs because you can ship a lot of items all at once instead of having to ship an item here and there.

9. Use layaway programs

By laying away a purchase - a gift for example - you won't have to put it on your credit card, and you can pay over the holidays until you've paid off the item. The store keeps the item in layaway until you have paid it all off. Layaway plans are seeing a resurgence in the recession, especially around the holidays. For more information, check out eLayaway.com.

10. Retirement Funds

Your retirement fund is not a savings account! Avoid dipping into your retirement funds. Figure out another way to either cut expenses or make more money. If there is no other alternative, know the penalties before you dip into your 401(k), IRA, or pension fund. You could be facing heavy taxes and an IRS penalty for withdrawing funds early. Withdrawing money from a retirement fund can cost you a full 50% of your retirement savings in taxes. There are ways of tapping into your IRA before the age of 59½ without penalties, however. To find out how, read this.

The long and the short of surviving this recession during the holidays is quite simple, really. Save any amount of money you can, anywhere you can. Period. Why spend more money than you have to? It may seem an insignificant amount of money you're saving at the time, but those dimes and dollars add up. Think of it as your new part-time job by investing some time in the strategies listed above. Think of it as giving yourself a raise. And during a recession, especially over the holidays, a raise is a much-needed boost.