The holiday shopping season is getting underway, but despite the not-so-gentle prodding of retailers and some economists, Americans are in no mood to overspend.
Millions are still struggling with unemployment or reduced income. Others are concerned about job security, home values and their stock portfolios even though the U.S. economy is growing again. Nearly two-thirds of consumers said the economy would affect their holidays, according to a National Retail Federation survey, with 84.2% of those respondents saying they would spend less.
They are people like Jaclyn Witt, an editorial assistant at Chapman University who is working less and worrying more this holiday season.
"I went from working full time to working part time, so I have to be more price-conscious," said Witt, 25. "I can't go buying whatever I want now. As it gets closer to Christmas, it's becoming more of a concern."
But you can still make merry without blowing your holiday budget. And we're not talking regifting a fruitcake either. Little tricks like shopping early, avoiding credit cards and sticking with last year's decorations could help you save a bundle.
Setting a budget
There's no formula for how much you should spend on the holidays, but some experts suggest limiting yourself to what you earn after taxes in three working days.
A more generous measure is to spend no more than 1% to 2% of your annual income on the holidays, said Morris Hamm, a personal finance expert and professor at the University of Phoenix. That's down from the 2% to 3% he recommended before the recession.
Once you've set a budget, make a list of everything you plan to spend money on. Include not just gifts for family and friends but travel expenses, entertaining costs and decorations such as the Christmas tree and tinsel.
If that total is significantly over the amount you plan to spend, start cutting items (or people) out.
"The economy has been so bad for so long that people are going to be thought of not necessarily as cheap but frugal and wise," Hamm said.
Before you hit the mall, create a separate budget for every person who remains on your list -- and stick to it. Think of a few gift ideas in advance and jot down their approximate cost; that way, you're less likely to make impulse purchases.
The best holiday deals will be found in toy aisles and on bookshelves this year, industry watchers say.
For weeks, the nation's top sellers have been aggressively slashing prices in an all-out holiday toy war.
In September, Toys R Us Inc. announced that it would open 350 Holiday Express toy locations nationwide that would feature the "hottest gifts" -- including dolls, action figures and educational games -- at "great values."
Two weeks later, Wal-Mart Stores Inc. said it was expanding its lineup of $10 toys from 10 items last year to more than 100 this holiday season; some of the toys will feature markdowns of as much as 50%.
The world's largest retailer also said it would announce new holiday pricing reductions every week.
"Many of these prices represent the lowest we've offered in years, because we know these are tough times for American families," Eduardo Castro-Wright, vice chairman of Wal-Mart, said in a statement. "We made a purposeful decision to focus initially on everyday staples as well as items that often require larger spending commitments in preparation for Thanksgiving and Christmas."