Can you afford the holidays?

"Even Santa is having a budget problem this year," said Dorothy Guzek, a financial counselor at the Troy, Mich., office of GreenPath Debt Solutions.

It's beginning to look a lot like a debit card Christmas. Credit cards aren't going to cut it anymore for many families.

Even credit-worthy consumers have seen fees increased on their credit cards, interest rates hiked and some credit card accounts closed completely by banks.

The number of credit cards outstanding has declined to 325 million - down from the peak a few years ago of 425 million, according to Diane Swonk, chief economist for Mesirow Financial in Chicago.

Shoppers will still use credit cards, she said, but many won't have the luxury of using credit as much as they would have in other years.

"If they could use more, they would," she said.

Feeling smug that you snagged some super deals on the weekend after Thanksgiving? Maybe you even nabbed a door-buster deal, say a 50-inch HDTV for $598?

How many more bargains like that can you really afford?

It's not a trick question. Money personality Suze Orman has a segment on her CNBC show called: "Can I afford it?" People throw open the financial kimono - telling her about their mortgage, their retirement savings, their debt - to get permission to buy a $28,000 table or a $1,500 scooter.

Of course, she'll give you a little lecture, too, if she decides to stamp the request "Denied."

Personally, I wonder how many people buy it anyway.

Diane Swonk, chief economist for Mesirow Financial in Chicago, says we're very likely looking at a "Debit Card Christmas."

Shoppers just don't have as much credit to use.

Like it or not, most people must look at their income and expenses to figure out how much extra money they have to spend at Christmas and Hanukkah.

Huntington Bank has what it calls a "Checkin' It Twice List" at www.huntington.com/checktwice.

Rebecca Smith, regional president for Huntington Bank, said the online tool gives consumers a starting point to discuss budgets.

"It's very tempting to go out there and spend beyond your means. There are so many sales," Smith said.

But consumers should have backup savings to cover at least a few months of expenses.

To use this calculator, you plug in a few simple numbers.

First, you need to know how much you have in the checking account. Of course, it helps if you balance your checkbook.

Second, what do you expect to make between now and Dec. 15? Again, it would help to know exactly what you're taking home - after taxes, after deductions for 401(k) plans, etc.

Third, what are your bills between now and Dec. 15? You'd need to know your mortgage or rent payment, utilities, groceries, child support, child care, cable bill, car payment and other expenses.

I plugged in some random numbers - say $800 in checking; $2,000 for income and $1,700 for bills. (You do not use dollar signs or commas with the calculator.)

Based on those numbers, the calculator told me I could burn through $1,100.

So I guess, maybe, you could buy a $600 HDTV and a $110 Lego Star Wars Clone Wars Republic Attack Cruiser, plus a $165 Nikon digital camera, an $85 fake suede jacket, a $40 pair of shoes, a $45 ham and spend the rest on groceries. But that's it - no $700 puppy.

Even so, I'm not sure I'd be comfortable with that. If you only have $800 in checking and no other savings, you're incredibly vulnerable if the furnace goes out or the pipes burst.

And I'm not sure I like some answers. I plugged in $10,000 in checking, no income and $2,000 in bills. And the calculator told me I could spend $8,000 during the holidays.

Again, if you cannot find a job, you must hang onto most of your cash.

Use the calculator as a guide, not as the final word.

Even if you're doing OK in this economy, now may not be the time to flaunt it.

Instead, Guzek suggests creating new traditions.

About three years ago, her family ditched the gifts and opted to exchange homemade baked items or candy.

The family gathers the Sunday before Christmas and exchanges their goodies. Guzek will spend about 20 minutes and about $20 this year making enough homemade peanut brittle for her four siblings and their families.

"We used to buy for everybody," she said.

HOLIDAY MONEY MANAGEMENT

- Take a serious look at your credit card debt. Being able to make the minimum payment alone each month is not enough. Skip the new outfit and put that money toward credit card debt.

- Figure out how long it will take to pay off credit card debt from the holidays. Ideally, you would want to pay your bill in full each month. If that is not possible, the longest you should stretch out payments is 90 days, according to the National Foundation for Credit Counseling. You could be in trouble if your holiday charges are more than you can pay off in the first three months of 2010.

- Take advantage of freebies: tree lighting ceremonies in the park, holiday movies on TV and children's concerts at school. Turn free events into family celebrations.

- Avoid too many small splurges. Add up the money spent on coffee while out shopping, a snack after lunch, extra gas when driving to outlet malls, wrapping paper and ornaments.

- Dig deep into your gift closet and give away many items that you bought earlier in the year. Don't keep buying more stuff to give away this year.

- Ask to donate money to someone's favorite charity. You might get a tax break - and offer a thoughtful gift during a rough patch. Or consider donating money to a charity instead of buying another gift.

- Think about all holiday spending. Should you really spend a month's take-home pay on gifts, decorations, charitable contributions, holiday travel and parties for just one holiday? If things are really tight, you might not even want to spend a week's take-home pay.

Susan Tompor is the personal finance columnist for the Detroit Free Press. She can be reached at stompor@freepress.com.

(c) 2009, Detroit Free Press.

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