Making Holidays Bright -- and Affordable

The winter holidays often have a bad reputation as the most budget-busting time of the year, but with proper planning, they don't have to be.

No matter how you celebrate during the season, putting all holiday expenses under the microscope is a good idea, and not just for gifts. The winter holidays are also a peak time for spending on travel, events, entertainment, energy, clothes and meals out.

Financial advisors recommend you use no more than 1.5 percent of your annual income on holiday spending. Consider the following suggestions to make the weeks between Thanksgiving and New Year's Day a little more affordable.

Create a list - and a budget. Start by making a list of all the potential spending based on everything from the kids' gift wish lists to dates on the calendar for parties and get-togethers. Gather all prices you can find for the essential items. Keep in mind that the Practical Money Skills for Life website offers a comprehensive holiday budget planner to help organize your information and track your spending.

Be honest about financial reversals. If you are facing financial difficulties during the holiday season, try not to spend to hide the problem. Don't be ashamed to adjust your spending and tell friends and family members that you'd like to temporarily downsize until conditions improve. You may find loved ones appreciate their own spending reprieve. Friends and family members can always draw names to buy gifts for one person instead of a group, host potlucks or find other low-cost ways to share time and make memories during the holidays.

Share the work. To save time and money, call in reinforcements. Let friends and family know you're looking for particular toys, gifts, foods or decorating items and volunteer to do the same for them. Save and share coupons. To save time and money, encourage your friends and family to share shopping questions, cost-saving tips or discounts they have spotted via social media. Results can come back in a matter of minutes. Also, creating a Google Alert for a particular item you need with the word "price" or "discount" might unearth affordable resources you weren't previously aware of.

Don't waste trips. Shopping is a fun part of the holidays, but constant runs for one or two items waste time, personal energy, gas and expensive parking fees. Keeping an eye out for free shipping deals for discount merchandise is one way to dodge rising transportation costs during the holidays. Consolidating errands in specific locations can save time and lower stress. To save on delivery, ask friends with large vehicles or trucks to help transport oversize items and utilize car pools or public transportation for events and entertainment.

Leverage your creativity. If there's something you make or do really well that receives compliments, consider making it a gift. Making cookies, candy or a recipe everyone looks forward to each year, designing clothes or jewelry, offering lessons or even pitching in with work around the house can be a worthwhile and personalized gift.

Build a year-round stockpile. If there are gifts or specialty food items you can buy on sale and keep for a while, you'll have a ready source of thank-you gifts for hosts, teachers or co-workers. If you have an eye for bargains - and an idea of what people on your list might be able to use and appreciate - a small stash of gifts you can grab and wrap in an instant may be a good approach. Set aside an area for cards, gift tags and wrapping paper that is easily accessible. Keep in mind that many retailers put holiday-themed items on sale before the holidays are finished. Take advantage of this by purchasing them at a discounted price for future gift giving.

If you don't have a gift fund, start it now. There is never a wrong time to start a holiday fund. Establish your gift budget and commit to putting aside 5 to 10 percent of each paycheck you receive around the holidays, If you exercise diligence, your holiday fund has the potential to develop into a savings account for additional goals such as emergencies or retirement.

Investigate charities in advance. Organizations like GuideStar, Charity Navigator and CharityWatch provide independent ratings on the effectiveness of various charities and how efficiently they use donations. It is always important to research organizations prior to making a donation to assure that your check is going to make a difference in supporting the cause.

Take notes for next holiday season. Create a paper or computer file where you can collect ideas for next year. Gifts and other items can be bought at lower prices throughout the year, so check resources like Consumer Reports and mark such opportunities for discounts on your calendar.

Bottom line: Keeping the holidays enjoyable - and affordable - is a matter of planning, sharing information and personal creativity. It can also be an opportunity to build savings for the future.

Nathaniel Sillin directs Visa's financial education programs. To follow Practical Money Skills on Twitter: