Don't go overboard.
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Christmas is the biggest time of year for retailers. In fact, it is said that the holiday shopping season makes up as much as 40 percent of a store's yearly sales. It's too bad for those stores, however, when many people decide to look for ways to celebrate Christmas on a budget. Christmas spending usually comes in three forms: Presents, decorations and food.
Rethink traditions. Does your family usually go see "The Nutcracker" every year, but this year you simply can't spend the money? Is it a tradition in your family to have Christmas portraits done at the studio for Christmas cards every year, but this year you can't see how to afford it? Try creating new traditions. Instead of going to see "The Nutcracker," visit a local high school's Christmas concert or play. Rather than spending a lot of money on a portrait studio, take a fun picture of your children in their Christmas pajamas with your digital camera.
Rethink gifts. If your family purchases gifts for each person, suggest drawing names, instead. Alternately, suggest giving "service" gifts. For example, your gift to your mother-in-law might be a day of cleaning out her kitchen cupboards, and a gift to your sister might be watching her children for a weekend. You could also make a rule that gifts need to be homemade. Homemade gifts can be anything from Grandma's secret oatmeal cookie recipe to a knitted scarf to a nicely framed photograph you've taken yourself. Finally, try asking everyone to give funny gifts purchased from a thrift store. Give a prize for the funniest gift.
Cut back on decorations, or make your own. Ask your children to help you string popcorn and cranberries, or make paper chains out of red and green construction paper. Cut out snowflakes and tape them to every window. If you are near a local forest, gather boughs off the ground and tie them together to make swags. Add inexpensive ribbon for an instant beautiful, fragrant Christmas decoration.
Make your own wrapping paper and cards. Local paper companies will sell you large sheets of blank newsprint and blank card stock for a low price. Have your children decorate the newsprint with original Christmas designs and drawings to use as wrapping paper, and decorate the cards, as well. For ribbon, use inexpensive twine or yarn for a rustic, country-Christmas feel.
Keep the food simple. You don't have to spend a lot of money and time making fancy Christmas treats and a lavish dinner. Instead, stick to the basics. Cook an inexpensive turkey, and serve it with comfort food such as mashed potatoes, beans and pies. Skip the fruitcake--no one likes it anyway. Everyone loves chocolate chip and sugar cookies, so you don't really need others. Don't serve alcoholic drinks this year, and don't put out a lot of candy or nuts--they are just fattening. Your guests will thank you for the saved calories.