Holiday

The average person will spend a good chunk of cash during the holidays -- $805, according to the National Retail Federation.

With the holidays around the corner, you might think it's time to crank up your holiday shopping -- right? Not so fast, says Suze Orman, financial guru and best-selling author. She warns holiday shoppers of the "buy-it-now bug," which comes around every gift-giving season.

If you want to spend less and save money this holiday shopping season, let Orman's financial advice be the voice of reason. Here are a few of Orman's financial tips that can help keep your shopping from going astray.

1. Have a holiday action plan
Just because it is the holiday season does not mean you can forgo financial goals. To keep your holiday spending on track, Orman recommends a holiday action plan. According to CNBC -- home of the "The Suze Orman Show" -- Orman's plan consists of the following steps:

  1. Decide how much money you can afford to give in total.
  2. Make a list of the number of people for whom you plan to buy a gift.
  3. Divide your total budget amount by the number of people on your list.
  4. Accept this as the maximum amount you can spend on each person.
  5. Ask the people on your list to write down five items in your price range.

Sticking to this plan can save you big time in the long run. You will be less likely to buy "gifts to impress" that come with hefty price tags.

2. Shop with cash only
If there is one sure takeaway from Orman's teachings, it is that you should not live beyond your means. In fact, she suggests you live below your means. You should not budge from this principle, especially in the midst of the holidays when it is all too easy to overspend.

If you are tempted by holiday sales, shop with cash only. In fact, do so anyway, even if you are sure you will not stray from your holiday plan.

"Challenge yourself not to buy any gift with a credit card. When you're limited to cash or a debit card (with no overdraft coverage), you're much more likely to purchase only what you can afford," Orman has written.

According to ABC News, consumer counseling agencies experience a 25 percent uptick in January and February, when consumers have holiday bills trickling in. Paying with only what you have available while sticking to a holiday budget can save you from the debt trap.

3. Ask yourself the "Three-Question Test" before purchasing
You might want to buy Grandma and Grandpa the latest iPad, but would they be just as pleased with a less expensive gift? To avoid the urge to splurge, Orman suggests applying her three-question holiday spending test, which asks:

  • Is it kind?
  • Is it necessary?
  • Is it true?

"Those are the three gatekeepers I personally use when I have a decision to make. I slow down and carefully ask myself all three questions. I will not do something if it is not kind, to me. Necessary, for me. And true to what I need and what I believe," Orman wrote.

What does Orman mean by "kind?" Even though you have good intentions with that iPad purchase, the gift might not be kind to you if it causes you to spend more than you can afford. And if it busts your budget, then it cannot be necessary.

"People you love would be ashamed to know you overextended yourself to give them a gift that isn't affordable. And for all the other people in your life you don't deeply care about, a gift is not necessary. A heartfelt note is all that is necessary," Orman wrote. As for "true," she has written that "every purchase in life should fit with your beliefs and goals."

4. Give the gift of time and love
Although it is the season of giving, that does not mean you have to open up your wallet. Sometimes, the best gift cannot be found in stores.

"Time and love are the most valuable possession you can share," said Orman. All you really need to do is give your time, service and love to others.

A service can be offering to babysit your niece, clean the house for your parents or cook a meal -- anything that shows you care. Orman also recommended homemade gifts, such as baked goods, a scrapbook or anything else that "might be meaningful to the recipient."

According to Orman, a gift of time and love goes much further than a gift you might still be paying for through the next holiday season. Doing something meaningful can also be memorable, as opposed to giving a gift that the person truly does not want or need.

"Chances are the person that you're giving the gift to won't even remember what you gave them next year but yet you'll still be paying for that gift for the next five to 10 years or more." So before opening your wallet, remember that you can bring someone joy by looking within and giving something of yourself.

5. Rethink your list of gift recipients
Are you making a list and checking it twice? Do you really need to purchase gifts for every person on your holiday shopping list? The likely answer is "no," particularly if it will set you back financially.

According to Orman, you should avoid obligatory gift exchanges. "If you don't have money and you're buying a gift for somebody, chances are they don't have money either. If you give them a gift they're going to feel obligated to give you a gift back. Now you're both going to have to put those gifts on your credit cards and you're both going to be spending money that neither of you can afford," she wrote.

If you cannot afford to spend money on gifts for everyone, narrow down your list and save yourself the financial burden. If you want to get a jump-start on your next holiday shopping season, Orman recommends checking with your "giving circle" before the hustle and bustle begins.

"Initiate a frank discussion with your nearest and dearest about scaling back holiday giving. This is the perfect time to break the all-too-common cycle of spending more and more money (which, let's face it, many of us don't have) every year -- and forgetting what the holidays are really about," she wrote.

Holiday shopping can be fun, if sometimes chaotic and even stressful. But it does not have to be expensive. Follow Orman's advice to save more, spend less and ring in the new year free of holiday debt.

This article originally appeared on gobankingrates.com.

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