How to Stay Out of Debt this Holiday Season

According to Toys R Us all of the hot toys for 2012 all cost more than $50, but you don't have to go into debt this Christmas. Here's how.

Start saving right now. If you get paid twice per month, you have five pay checks coming before Christmas. If your bank or credit union offers it, take them up on the Christmas Club. If you have direct deposit, the Christmas Club automatically takes a certain amount of money and puts it in a no-fee account to make you save that money. You can do it all throughout the year and it's awesome. Some of them have a minimum amount you must deposit and some make you pay a penalty if you take money out early, but it forces you to save that money and sure you may have to do without a little less each month, but it's better than starting out the new year buried under a mountain of credit card bills.

Do you have a credit card that gives you points or miles for gift cards? Use them! Do you have a tech geek on your list? Redeem your points for gift cards for stores that sell gadgets. Have someone on your gift list that enjoys DIY projects? Get them a gift card for their favorite home improvement store. You can also spend those points or miles on gifts for people so nothing actually comes out of your pocket. You've already spent the money throughout the year. Use it to your advantage.

Don't get a store credit card just to save a few bucks up front because it can be trouble down the road. Opening credit now can make a ding in your credit score; especially if you're opening a lot of credit cards in a short amount of time. Credit that's being offered now isn't as good as it once was and many store cards have lower credit limits so they're easier to max out and that looks just awful on a credit report.

Hit the dollar store. Not for gifts, but for wrapping paper, gift bags, boxes, bows and ribbons. It's just paper. Don't spend a ton on it because it's going to end up in the fireplace anyway.

Set a budget for what you're going to spend for each person and stick to it.