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How to get in the holiday spirit without going into debt

  • Last year, 27 percent of consumers who shopped during the holiday season had no budget, and another 24 percent went over budget.
  • More than half (56 percent) of shoppers last year incurred credit-card debt, up from 48 percent in 2015.
  • Setting a budget and sticking to it is the best way to avoid overspending.

For many people, getting into the holiday spirit means stringing twinkly lights everywhere, hosting parties plentiful with food and drinks, piling stacks of gifts for loved ones — and overspending.

If you head into the season of giving without a budget, there's a good chance you'll come out on the other side with a holiday hangover in the form of debt.

NerdWallet's Consumer Holiday Shopping Report shows that 27 percent of consumers who shopped during the 2016 season had no budget, and another 24 percent went over budget.

The survey also showed that 56 percent of shoppers last year incurred credit-card debt, up from 48 percent in 2015.

"A lot of people are still paying off holiday debt from last year," said Kimberly Palmer, a personal finance expert with NerdWallet. "You don't want to be in that boat."

Holiday budgets typically involve several components: gifts, decorations, food and travel (although if you haven't booked flights by now, finding good deals will be challenging).

Here are some tips to help you set a budget for the holiday.

Plan ahead

Make a list detailing your planned holiday-related expenses. For instance, make a list of the people you are giving presents to, along with the amount you plan to spend for each person.

"It's tempting to overspend when you are in the store, but if you have that initial list you can make sure you're not going over the set amounts," Palmer said.

Same goes for food and decorations. If you're hosting a gathering, make sure you have a shopping list and compare prices before you head out.

Evaluate payment options

If using a credit card won't cause you to overspend, it could be a way to reduce your overall cost.

Some credit cards let you earn rewards, while others have cash-back deals. Still others might offer price protection, so if the price drops, you can get refunded the difference, Palmer said. Others come with warranty protection on major purchases.

Keep in mind, however, that those reasons alone are not a reason to turn to plastic if you can't afford to pay cash.

"You only want to use a credit card if you pay your balance in full every month," Palmer said.

Don't wait until the last minute

After luring consumers with reduced prices and other special deals between Black Friday and Cyber Monday, prices start creeping back up as time passes and the holidays approach. If you can get yourself organized enough to take advantage of these timed deals, you can find a variety of deals — both in stores and online — that could disappear soon.

One exception to this is anything holiday-themed like decorations.

"The prices tend to go down as the holiday gets closer," Palmer said, adding that additional discounts come once the special day has passed. "If you can plan ahead, you could purchase next year's decorations this year when the prices drop."

Practice willpower

Actually sticking to a budget might be the trickiest part.

"It's hard," acknowledges Palmer. "It really is about writing down your budget and not letting yourself exceed it."

"On the Money" airs on CNBC Saturdays at 5:30 a.m. ET, or check listings for air times in local markets.

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