AS THE HOLIDAYS approached this year, Sarah Hawkins and her fiancee Seth Heller found themselves in a tight financial squeeze. The two are saving for their May wedding and paying off student loan debt as well.

Strapped for cash, and not wanting to run up huge credit card bills, they came up with a holiday gift plan that expresses their feelings for friends and family, but totals only $400.

'We are going to have small get-togethers with groups of friends to spend time together rather than money on gifts," said Hawkins, a Bay Area resident. "We're giving presents to family only."

Hawkins' budget ceiling is probably too low for most - the average consumer plans to drop more than $700 by the time Christmas arrives, according to the National Retail Federation. More than $100 billion is spent on shopping between the day after Thanksgiving and Christmas Day, according to CardWeb.com.

And this time of year is when people are most apt to land themselves in overwhelming credit card debt that may well dog them for the rest of the year — or longer.

But it doesn't have to happen to you, as Hawkins' suggestions indicate. Her approach is totally in line with the recommendations of San Mateo-based Freedom Financial Network.

"Setting limits is the most important thing you can do," said Brad Stroh, co-CEO of the consumer debt counseling company. "Decide on a pre-set dollar amount for how much you want to spend overall and work backward from that, deciding how much you want to spend for each person."

If credit cards are your downfall, put the amount allocated for each person in an envelope in cash and leave your credit cards at home.

“That way, there's a physical barrier to overspending. When the money is gone, you have to stop," Stroh said. Also, the credit maven noted, people are much less likely to overspend when they're using money as opposed to credit cards.

It's best to avoid using credit cards, but if you must, use the cards with the lowest rates, according to John Oldshue of www.BillSaver.com Store cards and credit have the highest interest rates, Oldshue said, so if you don't pay the bill as soon as you get it, it's not worth the purchase discount you get for signing up for the card.

Stroh applauded Hawkins 1 personal approach to gift-giving.

'These are people who mean a lot to you, and we're all so busy we don't spend time with them," Stroh said. "Instead of spending money, do something heartfelt and shared. A dinner, a date, a movie, just go for a walk or write them a nice note or something sentimental."

Hawkins isn't the only Bay Area resident who substitutes time and attention for big-ticket gifts.

"We put most of the fun in stockings and have at most one big thing for each person," said Caitlin Burke of San Francisco. "Family members with limited cash are encouraged to make commitments like babysitting or cooking meals."

Comparison shopping is essential, Hawkins and Stroh said.

"If you're pressed for time and can't go from store to store hunting the lowest prices, do it online," Stroh advised. You can compare prices on a wide range of products at MySimon.com and Yahoo Shopping. Also, Wal-Mart, Target, Sears, Macy's, Kohl's and other national chains have Web sites where you can price gifts online.

"Our family tries to keep shopping and costs in hand by putting the names of all adults into a hat, choosing one, and buying a
gift only for that person," said Jeanne Lese. "We set the limit between $50 and $75."

Another Bay Area resident recommended checking out thrift shops for bargins.

"For those who must have something new, you can usually find something that's still in its box," said Trina Robbins. "But even better are ‘vintage' and 'antique' items, which are just fancy words for cool used stuff."

Kristin Roth scored big (and saved big) using the personal touch with her gifts.

"Last year was a lean winter for me. I dealt with this by making my own gifts, and I got some of the most ecstatic reactions I've ever received in all my gift-giving years," Roth said. "I learned the basic knit-stitch, which is surprisingly easy to leam, and pumped out some truly gorgeous scarves. I was able to make several in one week."

Roth also baked cookies for some of the folks on her list (brownies are another ever-popular holiday offering).

A recurring theme mentioned by experts and individuals was starting early.

"For the best budgetary shopping moves, I recommend starting right after Christmas at the holiday sales," said Frances Gentile of Piedmont. "Prices are hugely slashed. Buy ornaments, wrapping, boxes and bags. Because you have purchased gorgeous velvet boxes and golden bows, even the smallest gift you wrap will seem precious."

Stroh agreed that smart shoppers stock up gifts throughout the year. But as long as you start before Dec. 24, it's not too late, he said.

"Just get online, compare some prices if it's a big purchase and make sure you're buying smart."

And above all, don't feel like you have to spend a lot of money, he said.

"People feel spending reflects the value a loved one has to them," Stroh said. '"You mean a lot to me, I want to show you how much you mean to me and so I will spend a lot on you as an individual.' But you could just tell them that."

Janis Mara can be reached at (510) 293-2465 or jmara@angnewspapers.com .

Click here to go to Freedom Debt Relief's website