The Christmas period sees many families running up huge credit card bills and getting into debt. Finance companies will often say that they are at their busiest in January as a result.

But things don’t have to be this way. At a time when many people are suffering due to the economic downturn, there should be less expectation that we’ll all go out and spend a massive amount of money this Christmas. The new reality dictates that many of us simply don’t have the money to spend.

Avoid using credit cards

This won’t necessarily stop people from spending. In fact, some would suggest that many consumers will be even more inclined to put all of their spending on credit cards. If we’re stressed and unhappy because of a lack of money, then we may decide that we can become happier by spending.

This is a dangerous position to be in. The problem with credit card spending is that it doesn’t have the same sense of reality as using cash, It doesn’t feel like real money.

The problem is that you will have to pay off that debt some time. Unfortunately, it’s not even a cheap debt. Many credit cards have extremely high interest rates, meaning that it could take you a long time to pay for your luxurious Christmas if you’re not careful.

Be realistic this year

But things don’t have to be bleak. You can take an alternative approach that will allow you to have a great Christmas, without running up a mountain of debt. It just means that you’ll have to ensure that you keep your spending under control.

How can this be achieved? Does it mean that you won’t be able to have a Christmas dinner this year? Not at all! It simply means that you need to think carefully about what you are spending.

Reduce spending on presents

One area where you can probably cut down is when it comes to gifts. You may well find that you buy a lot of expensive gifts each year. If you don’t really have the money this year then it could be a good time to scale back. Rather than putting everything on your credit card, it makes a lot more sense to spend less in the first place.

You may be concerned that this could create a difficult situation with friends and family members. They may be surprised to receive rather smaller gifts this year. If you’re worried about how they may react then you might want to talk about the situation prior to Christmas. Explain that you’re short of cash and that you can’t afford to spend as much as you usually do.

Loved ones will generally understand this. Most people know what it’s like to be struggling for money.

You’ll also find that you can save money by making money gifts. Consider doing some home baking and putting together your own Christmas hamper this year. That’s a great way to give a gift that will be enjoyed, without it costing you a lot of money.

Don’t be tempted to spend more than you can afford this Christmas. It’s unnecessary and will come back to haunt you throughout the whole of next year.