Annuities: The Last Of The Safe Investments?

Why Gold Matters

Top 10 Bailout Money Recipients

Tim Allen was crowned the ultimate Scrooge in the 2004 film Christmas with the Kranks when he proposed to skip Christmas altogether. His co-star Jamie Lee Curtis initially balked, but when he began adding up how much they could save--and spend on a tropical vacation instead--she began listening. So how much money could you save by skipping Christmas this year? And what could you do with it instead? Let's take a look.

Follow MoneyBuilder on Twitter

Gifts

The single biggest category of Christmas spending is gifts. This year the National Retail Federation projects that spending on gifts will drop only slightly, after a dramatic decrease of over 30% during the 2008 holiday season. Last year the average American spent the following:

Gift Recipients

Family members: $431

Themselves: $119.82

Friends: $94.52

Miscellaneous: $43.50

Co-workers: $26.70

Total: $750.68

According to the annual Gallup poll on holiday spending, last year's spending on gifts was down from a high of $862 in 2005. So if you choose to forgo all the gift-giving, you'll pocket, on average, approximately $750.68.

Christmas Tree

Entrepreneurs began selling the ubiquitous Christmas tree commercially in the U.S. in 1850. Today, whether you choose to venture into one of the nation's 12,000 cut-your-own Christmas tree farms or pick up a pre-cut one at your local hardware store, a real tree will set you back approximately $41.50.

Cards and Postage

Despite the advent of eCards, sending handwritten cards by snail mail is a long-standing tradition that is not going to die quickly. The average American family spent $32.43 on cards and postage to mail Christmas notes in 2008.

Flowers

While spending on Christmas flowers doesn't come close to Valentine's Day or Mother's Day, families still spend an average of $22.61 on holiday floral arrangements, poinsettias, etc.

Food and Candy

Christmas is a celebration, and celebrating in America requires food. However, the National Retail Federation found that Americans only cited spending $95.04 specifically on holiday food and candy in 2008. If that number sounds low to you, maybe the Information Resource Inc. holiday poll results reflect your spending--they reported that 94% of survey respondents plan on limiting their holiday food budget to $500 and 90% are planning on spending no more than $200 on holiday beer, wine and spirits.

Decorations

Decking the halls isn't free. On top of your Christmas tree cost, if you're like the average American, you're looking at spending in the neighborhood of $51.43 on tinsel, lights and ornaments.

Travel

Traveling to be with family and friends over the holidays can easily become the largest budget item for a family's holiday spending. According to a 2008 Maritz poll surveying Americans about their holiday travel plans and spending, respondents earning between $35,000–250,000 who chose to travel spent an average of $960.50.

Adding It Up

Choosing to pass on Christmas could save your family a pretty penny--just about $1,000 (if you weren't planning to travel) and nearly $2,000 if you normally travel but choose to stay at home this year.

Now that you've saved nearly $1,000, it's time to put that money to work. Here are some ideas for what you can do with your new savings:

--Open a high-yield checking account. Royal Bank of Missouri is offering new account holders a high-yield checking account paying an attractive 4.30% APY. Invest your $993.69 and if you meet their terms, including 10 point of sale debit transactions and at least one monthly automatic payment, you could wind up with $1,036.42--if you keep at least that initial amount invested.

--Invest in a CD. If you invested that money in a 12-month CD paying 2.10% APY through ING ( ING - news - people ) Direct (that provides FDIC insurance), you would earn $21 for a total of $1,014.56 toward creating an emergency savings fund or accumulating some cash for next year's holiday expenses.

--Start a high-yield savings account. By depositing that money in a savings account offering 2.25% APY with SFGI Direct, the online division of Summit Community Bank, you would have $1,016.05 this time next year.

--Pay down high-interest rate credit card debt. If you're not paying off your credit card balance in full each month using that $993.69 (or $1954.19) to at least pay it down--or preferably pay it off completely--will save you money on interest and be viewed favorably by your credit card company.

Katie Adams is a freelance writer for Investopedia.