Keep your holiday shopping on budget
By Melanie Chambers • Bankrate.com

Betty McPhee, 59, is a mild-mannered minister's wife in Bradford, Ont. But when it comes to saving money at Christmas, McPhee turns into Shoppin' Betty, a sale-hungry barracuda looking for a deal.

"Traditionally, I'm on the lookout for Christmas gifts all year round," she says. A lover of all things green and red, she starts shopping "in half-gear after the summer and full-gear November and December."

It's hard not to overspend during the holidays, given that many of us start to think that lavish gifts symbolize how much we love the person we give them to.

Of course, that isn't true. But it's hard not to think that way as you hit the malls and fend off the onslaught of Christmas advertising.

To help break the cycle of spending -- which will have you sweating bullets when your credit card bill arrives in the new year -- we've enlisted the help of McPhee and other thrifty holiday spenders for tips on how to keep your holiday shopping on budget.

A plan of action
Shoppers spend an average of $350 on the person on their list who receives the largest gift, according to a 2003 Ipsos-Reid poll. That's a lot of money spent on one person, especially when you consider how long most people's shopping lists are.

Laurie Campbell, a program manager at the nonprofit Credit Counselling Service of Toronto, says she isn't surprised to hear how much people spend on gifts.

At the Credit Counselling Service, the phone rings off the hook for the first three months of the new year. The story is always the same: shoppers overspent and are trying to figure out how to deal with their Christmas debts.

Campbell advises having a plan of attack. Don't just shop aimlessly -- have a budget, a list and a price range for each gift written out before you hit the stores.

Since most shoppers pay with credit cards, they often don't realize how much they've spent. To prevent this trap, she recommends wrapping a piece of paper around your credit card and writing down items as you buy them. "That way you're not shocked when you get the bill the following year," says Campbell.

If you plan to use a credit card, switch now to the lowest-rate card you can find. Determine which rate you qualify for, get that card and then rip up the old one. "Don't have two cards," says Campbell.

You can check out current low-rate credit card offerings at Bankrate Canada's credit card homepage.

No time like the present
"If you leave shopping to the last minute, you end up guilt-spending and buying very inappropriate and expensive gifts," says Campbell.

The best way to avoid last-minute shopping is buying your gifts ahead of time. While the last thing on your mind on Boxing Day is shopping, it is the best time to buy drastically reduced Christmas goods such as decorations, wrapping and Christmas cards. Not only will shopping on Boxing Day get you a good deal, but you'll be set for next Christmas a year in advance.

It's also a good idea to start saving now. Campbell suggests setting up a special Christmas fund so you don't go into debt buying presents at the last minute.

"A lot of people buy savings bonds though their work and cash them in if they wish to have money available to them next year. Or some use GICs," she says. Whichever route you choose, it pays to put aside money ahead of time, whether in one lump sum or a little bit each month.

Maureen Benoit understands the benefit of getting your shopping done ahead of time. She lives on the Queen Charlotte Islands, in British Columbia, and must send her gifts two months or more in advance to ensure they arrive on time. "Ordering early is a must here, or else you have to mail everything by air mail, which is expensive," she says.

When shipping gift parcels, you should also be conscious of their weight. Buy and send reasonably lightweight stuff to keep your postal costs down. "One year I sent books and canning goods; the box weighed a ton," says Benoit who, ever since, has paid more attention to the weight of gifts she buys.

Shop where the experts shop
Factory outlet malls are popping up all over the place, and many people think they're the best place to go for great deals. But beware -- many of these stores don't reduce their prices at all and make lots of money because of shoppers' misconceptions.

The best way to find a good deal is through trial and error. Keep a list of favourite stores that really do offer good discounts, whether around the holidays or some other time of year. Compare your list with ones your friends might have.

McPhee has a list of such shops and makes a special trip to hit them all at once. "I go down to Niagara to visit family and make sure to go to the Niagara Falls outlet mall -- especially The Body Shop outlet, because it's the best one," she says, having kept track of her deals over the years.

She also knows which stores will give you a discount on goods you bought a few days before a sale began: "Some stores like The Bay will give you a price adjustment up to so many days after the purchase," she says. So, be sure to ask about the policies of the stores you shop at.

Many stores will also match their competitors' prices. When McPhee found rollerblades for two of her three kids at one store, which were already discounted by 70 percent, she then discovered that National Sports would match the price.

"These rollerblades turned out to be an even better model than the ones I got for my two daughters. I ended up getting $300 rollerblades for about $49," she says. Most big-box stores will match their competitors' prices, so be sure to ask while you're bargain hunting.

Don't be afraid to re-gift
According to a 2003 Ipsos-Reid poll, two-thirds of Canadians receive gifts they don't like, and 33 percent of those people stick their unwanted gifts in the closet.

But instead of letting that gift gather dust in your closet, ask yourself whether you have a friend who might take a shine to it. I re-gifted a sweater I'd received one year. At first, I thought it was tacky, but the recipient loved it. If I still had that sweater, it would be collecting dust in my closet, so it worked out well for both of us.

Gifts from the heart
After losing her son six years ago, Helen Lammers-Helps, 40, of New Dundee, Ont., simplified her Christmas.

"We focus on the true meaning of Christmas," she says. "We pack Christmas hampers at the local food bank with our kids."

For those on her list who have it all, she makes a donation to a needy cause in their name.

Melanie Chambers is a writer in London, Ontario.