There is no doubt that Christmas is one of the most expensive and stressful times of the year. Many families find themselves still paying off Christmas debt months later.

It seems rather silly that so much precious money is spent on gifts that may not give lasting pleasure, if any at all. Economists would argue that spending money on gifts for others does not give the most satisfaction (or utility, in economic jargon) per dollar spent. That’s because it’s not easy to judge how much the other person will appreciate the gift.  Despite that, we still give gifts as an expression of love, gratitude or concern for someone’s wellbeing.

To enjoy Christmas without feeling guilty about overspending, you’ve got to set up a Christmas budget and stick to it.

Here are a few tips to help keep you out of the cycle of debt over Christmas:

Decide how much you can afford to spend. Set your budget now before you get caught up in the Christmas frenzy. Look at how much you can afford to spend. What have you saved already? How much more can you save between now and Christmas? What can you cut back on so you have a bit more to spend?

Decide what or who you are going to spend your budget on. Make a list of people or activities you plan to spend money on and allocate the total amount you have chosen to spend across all the items on your list. If you choose to spend more on one person than you have allocated, you will need to cut back on others to avoid blowing your budget.

Track your spending. Whether you use an App, a spreadsheet or a notebook, keep track of your spending so it doesn’t get out of hand. It’s easy to spend a few more dollars here and there which can soon add up to a lot.

Make a pact with family and friends. In large families, buying presents can get out of hand, both in terms of the value of presents bought and the number of people you buy for. Make a pact with loved ones to cut down on the number and value of gifts.

Take a year off. If you are still paying off last year’s Christmas spending, let alone starting to save for this year’s, have a year off Christmas spending to let your savings catch up. Turn it into a fun challenge to see how enjoyable you can make your Christmas with the least amount of spending. For example, you can give DIY vouchers as gifts – for babysitting, homecooked meals or home repairs – or you can use membership rewards to buy vouchers and gifts.

Start planning in January for next Christmas. Take advantage of the January sales to stock up in advance. Purchase gifts throughout the year so you can take advantage of special price deals or, alternatively, set aside money each month in a savings account.

Be an extreme shopper. Avoid the Christmas frenzy by leaving all your shopping to the last few days before Christmas, so that you don’t have time to spend too much and you can take advantage of last minute discounts. Alternatively, do all your shopping earlier in the year when sales are on, well before the Christmas frenzy strikes.

Play the Boxing Day game. Make a family game of buying all presents on Boxing Day and opening them that night. That way, you buy at bargain prices and there is a strict time limit that will help reduce your spending.

Give money instead of gifts to help you stick to your budget.

There are lots of reasons it’s good to give money instead of, or as well as gifts.

For students with low incomes and big debts, elderly people struggling to pay their bills, and children who are saving for something they really want, money is a welcome gift. You can use a gift of money as a way of teaching children about money; that is, explaining to them the need to set aside money for later, or to save for a goal. You could even give a small investment of shares or a managed fund to teach children how investment markets work. Giving money doesn’t have to be boring. Check online for creative ways to give money. There are plenty of ideas for how to use notes and coins to make decorative gifts, such a money bouquet, a money Christmas tree, or a box of money ‘chocolates’.

Christmas is a time for giving and sharing, and you can do this without spending a lot of money. Christmas is also a time to think about giving to those who are most in need. Include a charity on your Christmas list to spread the good cheer!