All too soon, the month of December is upon us, and many people are busy making preparations for various kinds of seasonal festivities. If gift exchanges, holiday events, party clothes, lavish decorations, and Christmas feasts are part of your plans at this time, it means you could be spending a lot of extra money this month.

In light of the current financial challenges being faced by the country and its citizens, we need to be very cautious when it comes to our spending choices. At the risk of sounding like the Grinch who stole Christmas, the reality is that this is not really the best time to be engaged in too much frivolous spending.

With 2013 promising uncertainty in many areas of national life, it makes sense for us to adopt a more prudent approach to what we do with our money. The possibility of more job layoffs, the depreciating Jamaican dollar and the ever-shifting date for a final IMF agreement are only some of the worrying signs on the economic horizon.

Therefore, it would be remiss of me not to sound a cautionary alarm to warn against getting caught up in mindless expenditure this holiday period. While we may wish that we could forget about our money woes and live life without a care about tomorrow, there are very few people who can truly afford to do this right now.

Christmas boon for business

I will admit that this holiday period represents the lifeblood that keeps most businesses alive for the other 11 months of the year. Without the massive Christmas spending that takes place at this time, many enterprises would not be able to survive. This would only lead to lost employment and further contraction in the economy.

It seems that the consumer is trapped in a classic catch-22 situation. We need to be careful with our personal spending so that we can weather any upcoming financial storms, yet businesses need us to spend more so that they can keep the economy afloat in turbulent waters. As the saying goes, “We’re damned if we do and damned if we don’t.”

So how do we strike a balance between the desire to engage in seasonal spending sprees and the necessity to be prudent penny-pinchers? Can we do our part to keep the retail engine of growth moving, while ensuring that we boost our own wealth position? Let’s look at some strategies that can help us to decide when it’s appropriate to scrimp or splurge:

Become a shrewd shopper

Have you ever grabbed something in the rush of trying to find an outfit for a party that night, or a present for the office pixie exchange later that afternoon, only to regret your decision later? Instead of buying in haste, take the time to make a list of what you need to buy and think about the right items that will suit your taste and satisfy your gift recipients.

When you’re spending your hard-earned money, don’t fritter it away on useless trinkets that you will make you wonder, “What was I thinking when I bought this?” Before you get hooked by the enthusiastic sales efforts of a store assistant, consider carefully whether your purchase will bring long-lasting benefits or just fleeting satisfaction.

Being a savvy shopper may sometimes lead you to spend more, as cheaper is not always better. If you have to buy big-ticket items such as furniture and appliances, find out about their durability and electricity consumption before making a decision. In some cases, it may be useful to purchase extended warranties to protect your purchase.

Make a difference with your dollars

While most shop owners will be very grateful for your business, there are some places that will be especially blessed by your financial contributions at this time. Support the work of charitable institutions that make Christmas cards, church and youth groups that hold fund-raising bazaars, or other associations that use your seasonal spending to benefit their members.

This is also a great time to encourage the efforts of some of the budding entrepreneurs who try to make some extra money during the season. You’ll no doubt discover ingenious, one-of-a-kind creations by scouting out these persons at craft fairs; and your support might just give them the confidence to take their business ideas into full-time production.

If you really want to reap enduring rewards from your holiday dollars, look for ways to invest your money instead of just expending it on food and festivity. You could forgo presents to instal a solar water heater at your home, skip the new wardrobe to start your house deposit account, or give up the vacation at the all-inclusive to fund your own business.

For this month, your mission is to make a conscious decision to qualify every dollar you spend – don’t be clueless about your consumption instead, pledge to make your spending really count.

Cherryl is a money coach, business mentor, and founder of Financially S.M.A.R.T. Services. Her upcoming book, “The 3 Ms of Money” will reveal all the secrets she learned about financial success. E-mail comments to cherryl@financiallysmartonline.com.