Suze Orman's 12 Tips to Fix Your Holiday Spending Habits

1. Make an unbreakable budget

“In January we start saving money, getting out of credit card debt, funding our retirement accounts, and we’re doing wonderful,” Orman says on The Suze Orman show.

“Then, every single year like clockwork, starting in November, all of you fall into this trap that says, ‘I have to buy this gift ... I can’t show up at this party and not have something for everybody.’”

Here are her five steps to managing your holiday shopping budget:

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

If you can't stand budgeting, you can also find apps that will do your budgeting for you.

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2. Ask yourself 3 questions

Before you decide to splurge on a gift, take a moment to reflect on whether it’s really worth the cost.

Orman says to ask yourself these three questions:

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

“Those three gatekeepers can help you slow down before you overspend this holiday season,” she advises on her blog.

“A gift purchase that comes from the deepest, purest place in your heart is nonetheless a mistake if it is not kind, to you. What do I mean by that? Well, if you can’t really afford the gift, it’s a bad choice.”

3. Talk to your loved ones

Just be honest with each other. If you’re running low on cash or stuck in debt and can’t afford an expensive gift, talk to your friend or family member about it.

If the other person’s going through the same thing, you can avoid the obligatory gift exchange and save you both from unnecessary spending.

“Initiate a frank discussion with your nearest and dearest about scaling back holiday giving,” Orman writes on Oprah.com.

“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.”

Consider gifting your time and love instead.

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4. Go homemade

Holiday cheer doesn’t need to come from a store.

You can still show appreciation for your loved ones by going homemade, baking treats or offering your time to babysit or clean. Orman even suggests writing a letter to express your love and gratitude.

“Always remember the holiday season is about giving,” Orman writes on her blog. “True giving is giving joy, is giving time, is giving appreciation [and] showing true love for others.”

5. Don’t get distracted by promotions

It’s tempting to seize on those great holiday sales you see advertised in all the flyers. But Orman says you should buy what you need when you can afford it — not just because it’s a good deal.

"Here is the main message: When do you buy what you need versus what you can afford?" Orman tells ABC News.

"If we just turned into a society that buys what we need, regardless of what we can afford ... We will get on the right path and give ourselves the greatest gift of all — the gift of financial independence."

6. Don’t wait until the last minute

Start thinking about what you want to give the people in your life so you can get your shopping done early.

You don’t want to wait until the day before Christmas Eve when store shelves are empty or buy the first thing you see just so you have something to place under your tree.

When you wait till the last minute to purchase a gift, “you’re buying things that are more expensive, you’re not thinking about it, and chances are that you’re buying things that the person you’re going to give it to doesn’t even want,” Orman explains on her CNBC show.

7. Buy small gifts people really want

Everyone has unused gifts sitting in the back of their closet, dusty and forgotten. Don’t make it worse — buy gifts that people will actually enjoy.

Orman urges you to pay attention to what your loved ones want or need (a specific hair product, for example) instead of maxing out your credit card on something generic they’ll re-gift in a few months' time.

“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,” Orman says on her blog.

8. Give cash, not gift cards

Some gift cards are great, especially if you can get them for free. However, just like an unused scarf or phone case, unwanted gift cards can clutter up your drawers.

“Last year alone, over $2 billion were not used on gift cards,” Orman told Today in 2013. “If you want to give someone cash, then give them cash.”

For those of you who do have unused gift cards sitting in a drawer, Orman recommends that you re-gift them to someone else, donate them to a nonprofit organization or sell them online.

9. Avoid using credit

If you’ve been trying to pay down your debt this past year, now is not the time to relapse.

Orman says to always shop within your means — and that means paying off your credit cards right away or leaving them at home.

"Challenge yourself not to buy any gift with a credit card,” Orman writes on Oprah.com. “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.”

If you’re afraid of missing out on cash back or rewards points, you should know that credit cards aren’t the only way to get them. The app Fetch, for example, will let you earn cash back just for snapping a photo of your receipt at multiple big-box retailers.

10. Rethink your nice list

You probably don’t need to buy gifts for as many people as you think you do. Take another look at your list of gift recipients and figure out who you’d like to prioritize to fit into your budget.

"If you don't have money and you're buying a gift for somebody, chances are they don't have money, either,” she writes on her blog.

“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.”

You don’t want to be stuck in a cycle of mindless spending, so focus on the important people in your life. If you’re participating in a Secret Santa at the workplace, Orman recommends re-gifting any old or unopened gifts sitting in your closet.

11. Shop Cyber Monday, not Black Friday

Holiday sales events might be your best bet for scoring great deals on fantastic presents, but don’t get carried away.

Orman recommends that you shop on Cyber Monday instead of Black Friday, since you’ll be less distracted by all the other stuff you see in store.

If you do decide to hit a brick-and-mortar location, write down what you need first.

“Write it down on a piece of paper,” Orman tells ABC News. “That is, if you are shopping, why are you coming to the mall? You need to think about it before you go.”

This year, most retailers are offering sales online during both days, so it’s smarter to just avoid shopping in-store entirely. Download a price-checking browser extension to compare deals instead of making the rounds at the mall.

12. Check online shopping portals

Instead of going directly to a store’s website, try shopping portals that get you cash back, discounts or coupons.

“I hope you take the time this holiday season to think strategically about how you can save as much as possible when doing your holiday shopping,” Orman writes on her blog.

Orman suggests using sites including Rakuten or TopCashBack.com to help you save while you complete your holiday tasks.