As one of my favourite Yuletide songs proclaims, “It’s beginning to look a lot like Christmas.” It’s hard to escape the commercial manifestations of the holidays – aggressive advertisements, sparkling shops and tempting trinkets – all screaming at us to “Buy, Buy, Buy!”

Many people who would normally jump wholeheartedly into the seasonal spending spree can only look on from the sidelines as spectators, as their bank accounts reflect the current economic crunch. Other persons have decided to throw caution to the wind by declaring that it’s business as usual this year. Armed with partner draws, overseas remittances, or credit cards dangerously close to their limits, some shoppers are living on the edge by spending more than they can really afford.

How can you balance your desire to participate in the holiday festivities, if you’re strapped for cash and your financial reality dictates frugality at this time?

Smart spending

It is possible to enjoy the merriment that the season has to offer, even with limited funds. Here are a few guidelines that can help you to spend wisely:

1. Use a budget

Successful budgeting is all about making choices about how and where you spend your money. If you regularly use a budget to plan your expenses throughout the year, it can help you to find areas where you can redirect funds for the holidays. For example, you may choose to carry lunch to work instead of buying it, and use the money saved to buy gifts or go to a New Year’s Eve party.

2. Prioritise your spending

Write down all the things that usually help you to get into the holiday mood. Do you enjoy seeing your home nicely decorated for the season, or do you get more pleasure from sharing gifts with others? Is this the only time of year that you go out and enjoy the company of your friends? Decide what is most important to you and channel your spending in that one area.

3. Make a list

Wherever you choose to apply your limited funds, make a list of the basic things you will need to buy. Forgo extravagant purchases by using your imagination to find items that will fit your budget. For example, I wanted a festive piece to trim a particular doorway of my house. Not finding any one decoration that was within my spending limit, I decided to put together inexpensive items to create the look I wanted.

4. Don’t cave in to pressure

With so many delectable items on display, it’s easy to get carried away and purchase things that are not on your list. One way to avoid temptation is to only carry the amount of cash that you have budgeted to spend – using a credit card is definitely not an option! Another tactic is to prepare a list of all the essential expenses that will be waiting for you in January and hold it in your hand while you shop.

The previous tips are useful if you have some amount of money. But what if you’re a casualty of the economic downturn and have lost your source of income? Do you have to give up on the merrymaking and gift-giving?

Cashless creativity

It has been said that there is no lack of resources, only a lack of resourcefulness; so you can still participate in all the trappings of the holidays if you use your creativity. Here are some innovative ideas that can help you celebrate without cash:

The purpose of holiday gift-giving is to show gratitude to those persons who impacted your life during the year. Sometimes people equate the level of appreciation with the cost of the gift, but it’s more important to give someone a gift they can truly utilise, than to worry about the price tag. If you have no money to buy gifts, consider giving of your time or talent instead.

Think carefully about what your friends and family would really appreciate you doing for them. You can design simple gift vouchers that can be redeemable for massages, car washes, cooking services, beach trips, or even de-cluttering a closet. If you grow fruits or vegetables, you can prepare a food basket with your organic offerings.

Chances are that you still have old trimmings from past years that can be reused. How about taking them apart and redesigning them to get a fresh new look? String lights on large potted plants instead of buying a Christmas tree, or spray gold or silver paint on pine cones and branches to make great accent pieces.

If you’re accustomed to throwing a big Christmas feast but can’t afford to buy the ingredients this year, why not have a pot-luck dinner where each guest brings one item? Create party themes such as games nights, beach picnics or movie evenings, where you can enjoy fellowship with your friends and family without the expense of going out.

So even if your money is in short supply, use your imagination and enjoy the holidays!

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Cherryl is a financial consultant and money coach, and founder of Financially S.M.A.R.T. Services; she is currently writing her first book, “The 3 Ms of Money.” Get free financial tools at www.financiallysmartonline.com and practical financial articles at www.financiallysmartadvice.com. Please email comments to advice@financiallysmartonline.com