The festive season can be a drain on your finances, but by following our tips and putting a few management strategies in place now, you and your finances might make it into the new year intact.

Smart shopping tips

• Set a budget for your gift giving this year to help you better plan your finances around your end-of-year spending.
• Make a list of all the people you need to buy for, and determine a spending cap for each person to help you stick to your budget. If you go over your budget, have another look at your list and reduce the amount you're spending on each person.
• Choose appropriate gifts that allow you to stay within your spending caps and make a list of your gift ideas.
• Shop around: before you hit the stores, take some time to do some research. Pick up the phone, or hop on-line, and shop around for the best prices.
• Give yourself plenty of time by setting aside a couple of mornings or a couple of afternoons to do your shopping if you've got a lot to get through. That way, if you can't quite get everything on the list in one go, you've still got time up your sleeve to finish the job.
• Have a back-up plan or 'plan B' so that if a particular gift idea isn't available, you've got a back-up plan that's still within your budget.
• Avoid frustration and fatigue, if you're tired or getting frustrated with shopping crowds, or if you're having difficulty finding what you're after, call it a day and try again in a day or so. You're more likely to succumb to impulse buying when you're tired, and you're more likely to make a rash gift purchase and possibly break your budget if you start to get frustrated.

Ideas that don't break the bank

Kris Kringles

Kris Kringles are a popular alternative to individual gift buying. Before your festive gathering, simply put everyone's names into a hat, and have each person draw out one name, and then buy a single gift for that person. The group should agree on the value of the gifts, so that everyone's on a level playing field. Even if the amount is more than you would usually spend on one person, it should still be a saving compared with buying gifts for everyone in the group.

Personal vouchers

It's often said that the greatest gift we can give each other is our time, so why not consider giving some 'personal vouchers' this year? For example, if you know a couple who have young children, give them a couple of babysitting vouchers, with you as the babysitter, so that they can enjoy a quiet dinner or movie alone during the year. If you know someone who lacks the mobility, strength or skill to do things around the home that they may need done, give a voucher to do a day or two of odd jobs around the house, or garden maintenance sessions once a month throughout the year.

Lucky dips for the kids

If there are lots of children in the group, you may find that many parents are quite happy to avoid 'gift overload'. Depending on the age of the children, lucky dips can be a cost-effective way to go, and one which still guarantees lots of fun for the kids. Simply buy small, inexpensive gifts appropriate to the age group. Then, pool everyone's wrapped gifts into a lucky dip and let the kids draw out their surprises.

Gatherings without gifts

Of course celebrating family or friendships doesn't have to be about buying and receiving presents. For example, if you and a group of friends usually exchange gifts at this time of year, an alternative is to enjoy a meal out together somewhere special. The cost of a good meal out could be a substantial saving compared with buying everyone individual presents, and, if you choose somewhere special, you'll still feel like you're enjoying a treat together.

If the group decides to make it a gathering for adults only, see if you can pool your resources and organise to have all the kids babysat at one house for a discounted rate.

Sharing the load

If you're hosting events with family and friends at this time of year, think about sharing the catering to help ease the financial pressure. Organise for everyone to pitch in and bring along a contribution to the table. Some forward planning will help to make sure there's no doubling up on the day. Even if people just help out with finger food and desserts, it's still helping to ease the financial pressure on you.

Don't lose sight of your priorities

It's easy to get carried away by the end-of-year hype (they don't call it the 'silly season' for nothing). But try to keep a cool head. Bills still have to be paid, rents and mortgages are still due. Make sure your festive season budget takes these priorities into account - that way you'll have a much happier ending to the old year, and a much happier beginning to the new one.

Plan now for next year

The 2007 festive season is already upon us, but here are some tips to help your finances get the jump on next year.

Take advantage of end-of-year sales

The last days of December and early in the new year can be a great time to buy ahead for next year. From Christmas trees and decorations to wrapping paper and gift cards, these sorts of items are often heavily discounted immediately after the festive season.

Put together your own hamper

A number of companies offer hamper-buying services that allow you to pay off a full hamper of foods and other luxuries by making regular payments throughout the year. These hampers are then delivered to your door in time for festive celebrations. Hampers can be a good idea, but it's important to do your homework. Do some sums and make sure you're getting a good deal – for example, could you spend less if you just purchased the items yourself during the year?

In addition, hampers are often purchased through direct debit payments. This can be a trap if you don't ensure that you've always got enough money in your account to cover the direct debit. In these cases, you could be hit with a bank fee if the transaction is rejected...and of course the hamper payment will still be due.

An alternative is to save up for your own hamper for end-of-year celebrations. Set aside a regular amount from your salary into a dedicated savings account (if you shop around you should be able to find an account that's fee free). Or, you could make small purchases throughout the year so that you're one step ahead by the time December swings round.

Buy presents when you see them on special during the year

If you're organised enough to come up with a gift-list well before the end of the year, you may be in a position to take advantage of retail sales during the year to help you buy the gifts you want at discounted prices. But choose wisely – make sure the gift you're buying in January will still seem like a good idea come December, as it may not be possible to return items that you bought months ago.

End-of-year savings ready reckoner

Save your way to a festive season bonus

The following table shows how much you could save towards the 2008 festive season, based on how much you set aside per week, and how early you start saving.

* Note that this table is a basic guide only. It assumes that you've found a fee-free savings account, and it doesn't take into account any interest that your savings might earn along the way.