Frugal spending yields generous gifts

The average American will spend $797 on gifts this holiday season, nine out of 10 purchasing their gifts at a shopping mall, according to a recent Gallup poll.

This is not a welcome statistic for students who work only part time, make barely above minimum wage or both. However, budgeting experts have found ways to afford practical gifts and stay debt-free at the same time.

"Commit to cash ... then stick to your commitment," said Mary Hunt, author of the upcoming book "Debt-Proof Living" and the web site cheapskatemonthly.com. "If you cannot pay for it in full at the time of purchase, forget about it. Stay away from malls and other commercial places that have spent millions of dollars to turn you into a blubbering emotional idiot who loses all sense of reason and puts pricey impulsive purchases on credit."

Hunt points to gifts without a preconceived price tag as an affordable option.  Examples would include food items such as fudge and cookies or IOU gift certificates for things like car washing, computer lessons or babysitting.

"Play to the recipient's emotions," Hunt said. "Make color photocopies of old family photos, even if they are black and white, then frame or scrapbook them. It's very cheap, $1 or less per copy, but very elegant and meaningful. Don't give a gift that has a reasonable probability of ending up in a garage sale."

"Since I'm studying all the time, I'm kind of deprived when it comes to spending my money so I kind of go nuts when I have that chance and that chance is always at Christmas time," said Logan Webster, a junior in business marketing at Cal State Long Beach.

Webster, who spends the bulk of his money on his girlfriend and family during the holidays, said he always uses cash despite the trappings of college life.

"Saving money is hard because, at school, there are always those opportunities with friends to go to movies, Starbuck's [and] In-N-Out," Webster said. "There's so many opportunities to spend $5 each day here and there."

Laura Williams, editor of the Frugal Living Newsletter at livingfrugal.com said the hardest part for students financially during the holidays is a lack of cash to buy the gifts they want.

"People understand that you are a student and are on a tight budget," Williams said.  "Don't go overboard with gift purchasing.  Are you buying the gift to make the recipient happy, or are you buying a gift that's out of your price range in order to bolster your image?"

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