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Illustration by Mark Wang

Holiday shopping can be challenging when you’re trying to save money. But with a bit of planning, a little discipline, and some creativity, it's possible to find great gifts on a small budget.

Years ago, Christmas shopping used to be my weakness. I was easily convinced that I needed everything that was on sale and I’d quickly charge hundreds of dollars without noticing. Every season, I would max out my credit cards trying to take advantage of all the deals.

But, when I converted to frugality and started to change my spending habits, I needed to find a better way to shop for gifts without breaking the bank. Today, I typically spend less than $250 on holiday gifts for nine people. That averages to about $27 per person. My list includes 4 kids, 4 teenagers, and 1 adult.

For clarity, my husband and I choose not to buy gifts for each other during the holidays. Instead we spend time together by going out for dinner and doing something fun. We even use restaurant gift cards from Costco to save on our experience.

Keep in mind that according to a survey by Country Financial, most Americans would rather have one of their biggest debts paid off than be given another present this year. Many people take several months in the new year to pay off debt incurred during the shopping frenzy. You don't have to be one of them.

Here's how I'm able to spend less than $250 on Christmas gifts — and how you can, too.

1. Figure out who you're buying for — and how you much you can reasonably spend.

It’s not enough to write a list of the people you’re going to shop for (but that's a start!). In order to save money and stay on track, you must set a budget.

I typically budget $20 per child, $25 per teen, $40 for my kids, and $40 for adults. That's only a guideline; I’m often able to stay well below those budgets.

That may seem like an insufficient budget for quality gifts. But I promise that it's not. When you take advantage of holiday sales and do some research, you can come across great prices on items your family and friends will love.

This year, I bought my two-year-old nephew a 3-piece outfit for $14.99 from Sears. The outfit included pants, a button-down plaid long-sleeve dress shirt, and a casual long-sleeve shirt. That comes out to about $5 per piece. Setting a budget for each person ahead of time can help you better control your spending and manage your money.

2. When you're buying presents, use cash only.

Paying with plastic has become easier in recent years. However, paying in cash can beneficial this holiday season. The amount of money you're spending can feel more real when you're handing it over to the cashier.

Using cash also makes you calculate what you have in your cart ahead of time, since you’ll want to make sure you have enough money to cover your purchases.

The other benefit to using cash is the fact that once it’s gone, it’s gone. You avoid overspending because you’ll know exactly how much you have left after every transaction.

3. Don't forget to track your spending.

Whether you use cash or card, gather and keep your receipts in an envelope. (Bonus points if you track all your spending on an Excel spreadsheet or by hand!) By tracking your expenses, you will stay mindful of your budget and will always know what you have left to spend. It helps you avoid a rude awakening in January when everyone else is snapping out of the shopping craze and realizing the damage of clicking "add to cart" one too many times.

4. Shop as early as possible.

There is no such thing as too early in my book. I shop all year around and store purchases in my gift closet. Shopping early serves two purposes.

First, you’re able to expand your search and have ample time to find the perfect gift at the lowest price.

Second, you’re able to pace your spending. You won't have to buy 12 gifts all at once and instead can decide to buy one or two gifts each month and have plenty of time to shop as your budget allows.

5. Practical gifts are your friend.

Practical gifts don’t have to be generic or distasteful. With a bit of creativity, you can customize a practical gift so the recipient feels special.

For example, you can get the person’s name engraved onto a tumbler or coffee mug or personalize a blanket with their name or favorite quote.

For the skincare enthusiast, a small gift basket full of face masks, scrubs, creams, and oils would make a great gift. Personalize it by adding a candle with their favorite scent.

For the cook, you can combine some inexpensive cooking tools along with a cookbook from their favorite celebrity chef.

With practical gifts, some personalization can go a long way in making the receiver feel special without much added cost to you.

6. Survey your online options.

Shopping online has many advantages. Besides the fact that you get to shop from the comfort of your PJs while avoiding mall traffic, parking delays, and long lines, shopping online can save you a lot of money. (But of course, you won't be able to use cash, which is one downside.)

Typically, when you’re shopping online, you can focus more on the exact items you need or choose specific departments to browse. You don’t have as many distractions as you do in the store.

Shopping in the store allows you touch and feel every object. Research shows that the more time you spend looking at and holding objects makes you willing to pay more for it. The inability to handle items while shopping online can help keep your buying emotions in check and curb your spending.

7. Use coupon codes and rebates.

I never shop online anymore without using a rebate site. The one I currently use is Rakuten, formerly known as Ebates. I get cash back when I shop at all of my favorite stores online, simply for purchasing things I was planning to buy anyway.

Around the holidays, Rakuten sometimes doubles their cash back percentages on select sites. I was able to get 6% cash back by logging in to their site, then being redirected to JCPenney, where I did some of my shopping this year.

When you’re shopping online, it literally pays to search for coupon codes. Before I check out, I make it a habit to do a quick Google search for “coupon code, [name of store], [month and year]” — for example, “coupon code, Macy’s, December 2019." I’ve been able to save up to 35% on items using this trick.

Holiday gifts don’t have to be expensive to be thoughtful and special. Being resourceful will help you save hundreds of dollars this holiday shopping season — and that's a present you'll be glad to give yourself come January 2020.

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