BOSTON (CBS) – How much should you spend on the holidays? I really don’t know! It depends on so many things. Your current income, debt level and the desire to gift. The average for Christmas is around $700. But I have spoken with people who spend thousands and those who can do it for under $200.

How much can you afford to spend? Review your budget. If you are struggling and are already in a negative cash flow situation which means you are spending more than you are earning you really need to reevaluate holiday spending. Spend as little as you can get away with.

If you are living paycheck to paycheck meaning there is nothing leftover each week do you want to go into debt for Christmas? Many folks are still paying off Christmas the following July.

But what if you have little kids? They don’t understand, nor can they really comprehend your need to budget. What can you do to make it happen for them?

For starters, no one else but the kids get any presents. Try shopping on Craig’s List. The Goodwill or the Salvation Army stores also have toys to buy, some new, others slightly used. Little kids don’t need a lot to make them happy.

Will the grandparents be buying the kids gifts? How about aunts or uncles? Share the kids’ wish list with them.

Consider the gift of time. I’ve talked about this before. Give a gift certificate, a promise, an IOU for what you will do in the future. Create a coupon book. Some examples; snow shoveling, lawn mowing, back rubs, gardening, dinner by candle light, brownies, fudge.

Next fall start going to yard sales. Look for things that can be used for Christmas gifts. Especially for kids under 6. You can throw those plastic toys in the dishwasher or wash them in the bathtub and they look brand new.

We have a Take It or Leave It area at our dump. This year our big find was a grocery bag full of Polly Pocket toys. Into the tub with some Dawn and bleach and a good airing in the sun they are a brand new toy.

You can have a wonderful holiday without breaking the bank. Christmas and Hanukkah are about the children and being with the people you love!

USA Today had a Christmas budget they put together several years ago and I kept the article. Total for a 9-foot Douglas fir tree with the trimmings, gifts for family and friends, fancy food, cards, stamps, wrapping paper and bows, party clothes, tickets to the Nutcracker, babysitting and a new snowman cookie jar was close to $5,000 ($4,906).

That’s a lot of money! More than I plan to spend on Christmas even with a granddaughter to shop for.

One more thing: When we moved into our first house on Thanksgiving many years ago we had very few dollars left over for Christmas. But we had a little girl who believed in the magic of Christmas. My husband made her a play stove from the leftover plywood and I painted it white and the burners black. He made her some shelves and I collected food boxes and we made her a grocery store. Our only purchase was a toy cash register.

Also, a heads up on a new Money Matters newsletter. So many listeners call or e-mail that they have missed a segment and where can they get a copy. Well now every Monday morning you can get the previous week’s segments sent to you. To sign up you will need to go to


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