Holiday money mistakes.You and your wallet will be jollier if you avoid these financial pitfalls. With the sour economy, holiday budgets are tight this year. In fact, according to Consumer Reports, 65% of Americans plan to cut back on spending this season, particularly on gifts and travel.

Sentiments like this have prompted retailers to try harder to lure shoppers in the door. Deals are everywhere. But even with such abundance of bargains -- or perhaps because of it -- it's easy to go overboard or make other spending mistakes.

Avoid these 10 missteps to stretch your holiday dollars further this year.

1. Being blinded by bargains

"It was 60% off! How could I pass that up?"

Sound familiar? But just because something is a good deal doesn't mean it's a good deal for you. With so many discounts this season, it's easy to fall into the trap of buying something simply because it's on sale. You may spend more than you normally would have or end up with a closet full of cheap, unnecessary stuff.

Stay focused by drawing up a budget and gift list before you head to the stores. Write down everyone you need to buy for, along with the amount of money you're willing to spend on each person. Then jot down gift ideas for each person on your list. An hour of forethought can save you a bundle in the long run.

2. Forgetting to budget for the extras

Gifts aren't the only expense this time of year. Don't forget to factor in the costs of greeting cards, postage, family photos, shipping, décor, entertaining and travel.

Even the utility bills for your festive outdoor light display might turn out to be an unpleasant January surprise.

3. Buying on credit

Financial experts say those who shop with credit cards tend to spend as much as 30% more than if they'd shopped with cash. The reason: When you shop with cash, you're more aware of how much you spend and how much you have left because you can touch it. And once the money's gone, it's gone.

Plus, if you have to put the purchase on your credit card or sign up for the store's financing, you simply cannot afford it. Any good deal you thought you were getting will be eroded by the interest you'll accrue and the time you'll spend as a debt hostage. About 12 million Americans are still paying off last holiday's bills, according to Consumer Reports.

4. Not keeping the receipts

Don't you hate it when you buy something only to find the store puts it on sale the following week? Hang on to your receipts. Many retailers will honor the sale price if you had made the purchase within a few weeks and will refund you the difference.

Keep your receipts, also, in case you or a loved one needs to make a return. Without a receipt, you may only get store credit -- or your return could be refused altogether.

5. Spending to impress

This is a biggie, especially for young adults who may feel compelled to prove their success and their new independence. Don't let your gift giving become a larger statement than the gift.

Before tossing something in your cart, ask yourself if it's something the person will really use and if you can really afford it. And the same goes for entertaining. It's the company of friends that matters, not how much money you spend.

6. Over-giving

It's wonderful to get caught up in the spirit of giving, but not if that means you'll break your budget or go insane trying to pull it off. You don't have to buy something for every single person you know (co-workers, neighbors, newspaper deliverer, that nameless guy you make small talk with at the bus stop).

Stick to the people who count most in your life, such as family and close friends. You might even suggest drawing names among groups of co-workers or relatives to whittle your gift list further. Chances are others are feeling the strain, too, and will welcome the idea.

7. Giving in to gift guilt

Don't let guilt drive you to break your budget or go into debt. You don't have to spend the same amount of money on every kid on your list, for example. Giving thoughtful, age-appropriate gifts is much better.

You also are not obligated to give a gift that has the same monetary value as a gift someone gave you, says etiquette expert Peter Post, or even to reciprocate unexpected gifts. Simply accept the gift and say thank you.

8. Failing to do your homework

That discount looks like a good deal, but do you know if it's the best value for your money? Remember, inexpensive sometimes just means cheap. Hit the Web before making major purchases to compare prices, read customer reviews and make sure you're getting a quality item at a good price.

Check the Web for coupons, too. Many retailers offer coupons you can print and take to the store, or you'll find e-coupons to save on your online purchase or your shipping costs.

9. Procrastinating

In the frenzy of last-minute shopping, you have no time to give thoughtful presents. So you compensate by spending more.

If you're shopping online, aim to make your purchases by mid-December. That way, you won't have to pay extra for expedited shipping, and your gifts stand the best chance of arriving on time.

10. Giving fruitcake

And for heaven's sake, don't waste your money on a bad gift. You may as well toss your money on a blazing yule log. Here are some common gifting gaffes to avoid:

Gadgets they'll never use: golf-ball-finder glasses, battery-powered potato peeler.
Desk clutter: "gone fishing" plaques, Zen gardens, paperweights.
Overly personal: lingerie, nose hair trimmers, weight-loss books.
Thoughtless: cookies for the diabetic, wine for the recovering alcoholic or the same gift for the same person two years in a row.
Tacky: holiday apparel, stuffed animals for anyone over age 10.
Clichéd: snow globes, coffee mugs, Chia Pets and, yes, fruitcakes.

( msn.com )

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