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Let's face it—every dollar earned in today's economy is a hard-earned one and blowing your budget on holiday spending is just not an option this year. While everyone is tempted to splurge during this festive season, you don't want to be left paying the price for it in 2012.

According to financial advisor and author Leslie Greenman, the psychology of gift giving isn't necessarily good for your financial health. The joy of pleasing everyone on your list with the gift of their dreams will quickly fade once you're confronted with the impact it's had on your finances.

Greenman offers the following great tips for controlling your holiday spending this year and keeping your finances on track:

• Assess your financials in advance. Before you even make your gift list, look at how much you can realistically spend, advises Greenman. If the amount you're considering has you feeling anxious, then absolutely create a budget that has you spending less. Don't allow your holiday spending to negatively affect your bigger financial goals.
  
  
• Eliminate discretionary holiday spending. Increased holiday spending often goes way beyond gifts to a wide range of expenditures, such as cards, wrapping paper, a new outfit for the office party, decorations, etc. These are easy expenses to cut back on, however. If you're hosting a party, make it pot-luck. Send e-cards instead of expensive printed ones. And remember when it comes to holiday decorations, less is always more.
  
  
• Don't shop when you're down. With the joy of the holidays often comes stress and a dose of the blues. According to Greenman, studies show that we're willing to spend more when we're sad, so if you're down, curl up with a holiday movie or spend time with friends. Save the shopping for when your spirits are brighter.
  
  
• Give the gift of time together. Chances are, many of those on your holiday gift list would like to cut back on spending, too. So suggest spending valuable time together instead of purchasing gifts this year. Have your parents over for a festive dinner with their grandchildren and plan to meet your best friend for tea and a movie. Not only does this decrease gift spending, it nurtures the true spirit of the holidays—relishing time with loved ones.
  
  
• Create a shopping plan. When you do head out gift shopping, establish a clear plan in advance: make a gift list and figure out where you need to go for each present; establish how much you will spend on each gift; decide a time you want to finish by; avoid malls/areas that tend to stress you out; try to complete your holiday shopping as far in advance as possible.
  
  
• Use cash. If you stick to paying with cash, you'll be less likely to exceed your gift budget. Credit cards give us the false notion that we can spend more than we can really afford. Never make purchases on your credit card unless you can pay them off at the end of the month.
  
  
• Trade in rewards points for gifts or gift cards. If you have accrued rewards points from credit card use during the year, now is a great time to use them.
  
  Steve Breihan