Buying presents, flying cross-country to visit relatives, having special dinners and parties -- consumers spend more money in the three months before New Year's than at any other time of the year. In fact, retailers often make about half of their annual profit during this time, according to the National Retail Merchants' Association.

Much of the buying will be done on credit. That's not surprising, given that banks mail over three billion credit cards solicitations each year to American consumers. It's also not too surprising, then, that many people get so carried away at the holidays that they can't dig themselves out for months or even years.

To help keep your cheer intact before and after the holidays, we've compiled a few tips on being generous without inviting disaster.

Before the Holidays

If you want to save money, this is the time to make your resolutions -- not after the New Year.

1. Cut your gift list. The easiest way to reduce how much you spend during the holidays is to exchange gifts with fewer people than you have in the past. Be honest: Aren't there a few people on your list that you question year after year? Make this the year you put an end to it. You might even talk to those people in advance and agree that, in the name of saving money and reducing stress, you won't exchange gifts but will get together to do something you both enjoy -- such as taking a stroll around the lake on Christmas afternoon.
2. Find alternatives to purchased gifts. Maybe stopping cold turkey on a gift-exchange with certain people doesn't feel right. But you don't have to go overboard, and you certainly aren't obligated to buy a gift. Granted, it's a natural temptation, especially when you're bombarded by relentless advertising telling you that the expense of a gift is the measure of the feeling behind it. But try being creative with alternatives: homemade treats, a coupon for your services such as babysitting, pre-addressed and stamped envelopes so an older person can easily keep in touch, a family photo or a tax-deductible contribution to a charity are all thoughtful gifts sure to be appreciated.
3. Make a budget. Once you've figured out who you still want to buy gifts for, you will do yourself a huge favor by determining your overall budget and having a general idea of how much you want -- and can afford -- to spend for each person. This will help you avoid the temptations and frustrations of last-minute impulse buying.
4. Spend within your budget. Having a budget will be about as useful as melted ice on a hot day if you don't stick to it. This takes tremendous discipline, and you may want to enlist help. Shopping with someone who can provide the voice of reason is the best way to keep from overspending.
5. Get started early. Good deals are often available before the official holiday shopping season starts on the day after Thanksgiving. Prices are usually lower, you have more time to take advantage of mail order bargains and you can find some great deals on models that are being phased out toward the end of the year.
6. Look for good gifts that are also good buys. Learn about the features and options available on a particular product, especially expensive items such as cameras, video equipment, sporting goods, stereos and computers. Get specific product numbers before you shop around so you're not comparing apples to oranges. Read up on different makes and models so you won't be swayed by the more costly recommendations of zealous (and commission-hungry) salespeople.
7. Once you've narrowed the field, look for bargains. Studies have shown major price variations -- often 50% or more -- in the same area for identical products, especially audio-video and computer equipment. Don't assume that prices are always lower in catalogs or on television shopping channels, no matter what their ads claim.
8. Know the store's return policies before you buy. If what you thought was a perfect gift for Aunt Bertha turns out to be a duplicate or doesn't fit (her body or her tastes), you'll want the store to allow Bertha to return the item for a refund, credit or exchange. Because sales help is often transient during the holiday season, and temporary employees may not be fully informed of store policies, ask the clerk to write the refund policy on the receipt. You'll need to hold onto the receipt anyway in case you want to return the gift.
9. Avoid buying unnecessary warranties. Many consumer products come with warranties, especially audio-video equipment and appliances. It may be worth the price to buy a more expensive model if it comes with an excellent performance guarantee. And remember that some credit card companies double the length of the warranty on anything purchased with their card. But resist the pressure to buy an extended warranty or service contract, usually offered on electronics and appliances. They often duplicate the product's existing warranty and rarely are worth the extra cost.
10. Keep records of all your purchases. To make sure you stay on track -- and so you won't be surprised by gigantic credit card bills after the New Year -- keep all sales receipts. Receipts will also come in handy when monitoring your credit card statements.

When the Bills Come

Once you've spent the money and the bills arrive, you can still make your holiday dollars go further by paying your bills as quickly as possible. Credit cards generally require 2 to 3% of your current balance each month as a minimum payment. For a $1,000 balance, that's $25. But if you pay $25 a month at the average interest rate of 18%, you'll be burdened by this year's holiday purchases well into 2003. And you'll end up paying hundreds of dollars in interest on that $1,000.

Of course, the best way to avoid these charges is to pay by cash, check or debit card, not credit card. Admittedly, however, that's rarely possible. The next best thing is to pay off your entire credit card bill when it comes. But not everyone has a spare $1,000 lying around after the holidays. Even so, if you can pay $50 a month instead of $25, you'll pay off your balance a full year earlier and save more than $100 in interest.

Another option is to look for offers of low-interest credit cards to which you can transfer your balance. You'll save yourself a bundle if you pay off your $1,000 balance at 6.9% a year rather than 18% per year.

Finally, if the best advice goes unheeded and you get in way over your head, consider contacting a debt or credit counseling agency such as Debt Counselors of America (http://www.dca.org) or Consumer Credit Counseling Service (http://www.nfcc.org). A good debt counselor can get creditors to stop collection efforts and help you work out a budget and repayment plan.