Editor's note: Suze Orman is a financial adviser and hosts "The Suze Orman Show" on CNBC. She has written several books on managing personal finances, including her latest, "The Money Class," which will be released in paperback Jan 10th.
(CNN) -- I hate the holidays. Professionally speaking that is. This is the dangerous season when more family finances go off the rails than at any time of the year. From the opening gun on Black Friday through the last-minute grabs on Christmas Eve there seems to be a national moratorium on sound spending practices.
That said, if you're expecting some finger-wagging lecture about not spending money on gifts this year, well, I hate to disappoint you, but that's not where I am headed.
Gift-giving is part of our celebration ritual. And there's nothing wrong with that. All that I care about -- and what you should care about just as much -- is that your gift-giving shows respect. For yourself. That means crafting a gift-giving strategy that is affordable for you today.
What you gave to someone last year, or the length of last-year's gift-giving list should be irrelevant. Yet we all know that there's this internal pressure to keep up appearances or traditions, even if your financial circumstances have changed. So even if you did a fabulous job the first 11 months of the year scaling back your spending so you could ramp up your retirement savings, or pay down your debts, there's a temptation to let those good habits get pushed to the back burner during this dangerous season.
Here's how to make it through this holiday season with your financial integrity intact.
I challenge you to not make one holiday gift purchase with a credit card. You can't have regrets in January if you limit your spending to money you actually have. The tab for unpaid credit card balances in the U.S. is $690 billion. It's one thing to run up a balance if your family is struggling to make ends meet -- and even that has obvious serious consequences--But there is just no excuse for running up any credit card debt for gifts. Period.
The simplest way to keep your household on track is to put the credit cards away and use a debit card tied to a bank account. And don't you dare let the bank snooker you into accepting overdraft protection. That's just a temptation to allow yourself to slip and spend more than you have. The only one who really benefits is the bank; the average charge for an overdraft is $30.
It takes a plan to make it through this season unscathed. Here's my three-step strategy: Set a spending limit, stick to a firm list of recipients and most important, no wavering from steps 1 and 2.
Your spending limit is pretty simple: How much extra cash do you have handy? No dipping into savings (unless you in fact were smart and have a holiday savings account you've been socking money into throughout the year). No touching the emergency fund. No gift is an emergency. And no robbing Peter: No cheating by not making your Roth IRA deposit this month or skipping the kid's 529 College savings contribution to free up cash for presents.
Next, decide who's on your list. Then divvy up your cash to each person: literally write down how much you intend to spend on each person. If the numbers don't add up, then you've got a few choices: Spend less on that person, spend less on someone else. Reduce the number of people on your list. Or get creative: Offer to babysit for the kids of harried friends or family. That's probably going to be worth a hell of a lot more than any monetary gift. Have a friend who keeps talking about tackling cleaning out their garage or fixing up a spare room? Okay, your gift is three weekends over the course of the year to serve as their sub-contractor and cheerleader.
You get the idea: Before you spend a penny on gifts this season you need to have a formal plan from which you will not deviate.
Don't get played
Retailers know we are suckers for anything that seems like a deal. So they try to play us for chumps. Instead of offering a $50 sweater for $50, they advertise that the sweater was $75 but they are going to let you steal it from them for $50. Woo-hoo, one-third off!
And this works like a charm thanks to our anchoring habit. That's a term used by behavioral economists to describe how we get fixated on a number. In this case, we're anchored to the fact that the sweater is "worth" $75, so we feel like we're getting a great deal at $50. But is it really a deal? For starters, slow down and size up what you're buying. Does it seem worth it at $50? Quality matters. And most important, do you have the $50 to spend? The sales price doesn't matter if you were intending to spend $40 on this specific gift. It's still overpriced by 20 percent based on what you can truthfully afford.
Standing in your truth is the most important gift to bestow this and every holiday season. It's not just about doing what is right for you. When we stand in our truth -- without embarrassment, without fear -- we remove layers of stress and panic. And that makes us happier and more present for those we love. That strikes me as the most generous gift any of us has to give.
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The opinions expressed in this commentary are solely those of Suze Orman.