How do I do that?

There's no doubt many people are finding the financial situation tough. Lower interest rates and petrol prices may have provided some welcome relief but as the economy slows, things are likely to get worse before they get better. The last thing you need is to blow the budget over the silly season and find yourself in strife as a result.

That means approaching this holiday season with a more disciplined approach. Credit Union Australia acting chief executive, Rob Nicholls, says consumers should set a budget for how much they can afford to spend rather than racking up big credit card bills to be paid off later on. Make a list of what you want to buy before you go shopping. Nicholls says people are less likely to impulse-buy if they've written it down first. Try to work out a budget for each item on your list and shop around for the best price. Retailers have been doing it tough too and the odds of finding a better deal have improved as a result.

Be realistic about what you can afford, Nicholls says, especially if you're putting it on credit to be paid for later. In fact, Nicholls says it makes sense to have a strategy in place to manage debt before hitting the shops this festive season.

What sort of strategy?

By having a realistic picture of how much you're likely to spend, you can choose the most efficient way of using credit. If you know you can pay off your credit card when it's due, Nicholls says you can make good use of any interest-free period.

But if you're likely to take several months or more to pay off your Christmas spending, it may be better to use a card with no interest-free period but a lower interest rate.

If you're prone to bingeing, Nicholls suggests asking your card provider to reduce your credit limit. It sounds drastic but not having excess credit available removes the temptation to overspend.

If you have several cards, lock some away until after the silly season. Make a resolution not to use them until late January - by which time the bills for your holiday spending will be in and you'll have a better idea of how much you're up for.

GE Money Australia chief executive, Mike Cutter, says other forms of debt - such as interest-free retail promotions and personal loans - may also be an option. But in each case you should weigh up the likely costs before signing up. He says you should take into account any establishment and monthly account fees as well as the interest rate.

Another consideration is payment flexibility. Are there any penalties if you pay the loan out early? And if you use an in-store promotional deal, how is interest assessed if you don't pay the loan off at the end of the interest-free period?

Cutter says your budgeting should cover your total likely spending - not just spending on each item. He says consumers may pay cash for big items then be forced to put all their other spending on credit because they've left themselves short. There may be more efficient ways of payment available.

Nicholls says consumers should ideally plan to clear existing card debt before the silly season and avoid using credit altogether. It's a bit late for this year but he suggests setting up a dedicated savings or Christmas account to prepare for next year's spending. An idea for your New Year's resolutions list?