10 Tips For Holiday Shopping On a Budget

Nov. 29 -- Today is Black Friday, the day retailers move out of the red and into the black, and the day that many of the rest of us move into debt from all the holiday shopping we're doing.

But it doesn't have to be that way. Here is my holiday "Top 10" on how to save money during these 26 days between now and Christmas.

1. Debit Instead of Credit: Use debit instead of credit cards. A debit card automatically forces you to spend only what you have, and allows you to avoid paying interest. Leave the credit cards at home. Let's say that you go ahead and charge the $817 (that is the amount which the average American is planning on spending this holiday), and pay the minimum payment of $10 a month with an average annual percentage rate of 18 percent. It would take you 133 months to be rid of your debt. In that time, you will pay $840.83 in interest.

2. Know Your Budget: Know your budget, and make it non-negotiable: $10 means $10, not $12. Be sure to keep a running log of what you spend.

3. Don't Get Department Store Credit Cards: When you open up a new credit card, many retailers offer you a 10 or 15 percent savings on your first purchase. But that savings will quickly vanish if you don't pay off your credit card balance in full. Some retailers, like Marshall Fields, for instance, will hit their customers with annual percentage rates upward of 20 percent.

Mellody's Math: If you pay $100 for a blouse and take the 10 percent discount, you would pay $90. However, if you were unable to pay the balance by the due date, you would pay $18.90 in interest, assuming a 21 percent APR, which would completely wipe out your $10 savings. You are now paying $108.90 for the blouse that was originally priced at $100!

4. Make a List: Make a detailed list of who you want to buy for, how much you want to spend, and which gifts you expect to buy. This keeps you focused.

5. Pre-Shop: Do some research before you hit the stores. Call around and go online to find better deals. You should also try to consolidate to a few stores to cut down on transportation costs.