Hosting a Holiday Bash on a Budget

Ditch the mail invites, break out the slow cooker and get ready to party without depleting your holiday bonus.

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Hitha Prabhakar
Hitha Prabhakar
The biggest season for entertaining is upon us. In 2010, Americans spent a record 20 hours wining and dining with loved ones during the holidays, according to a Consumer Reports study. About 15 hours on average were spent attending holiday parties, gatherings or events with friends or family. And approximately a quarter of Americans spent more than 20 hours getting their cheer on.

With all of that fun to be had, it's no wonder people want to party but still stay within their means. Here are eight tips to make sure that happens when hosting a holiday bash this year:

Think small. Bigger is not always better. Decide on a budget in advance and plan everything, including the size of the gathering and type of food you will serve. Then, make sure you don't deviate from the plan! Sticking to the number will help keep the costs under control.

Ditch the formal invitations. For a free and eco-friendly way to get the word out, send invites via email or online services. Not only will RSVPs be immediate, you'll be able to message the entire party at once if a date or location needs to change.

Get crafty. It's fun to dress up your house for a party, but going overboard on decorations can result in a financial hangover when it's all said and done. Instead, personalize your gathering with handmade place cards and holiday centerpieces. Do-it-yourself sites provide great inspiration for party favors and gifts such as cookie mix in a custom-labeled jar or mini evergreen trees that guests can plant at home.

Accept offers. Most guests will automatically ask what they can bring, so don't hesitate to take them up on their offer! It will be a fun way to involve your guests and make it less stressful on you and your budget. Ask them to bring dessert or their favorite bottle of wine to share.

Choose a themed cocktail. It can be frustrating and expensive trying to ensure everyone's cocktail or liquor of choice is readily available. Cut out the stress by picking one drink and dubbing it the party's signature cocktail (mulled wine and champagne punch are dependable crowd pleasers) or offering a limited variety of wine and beer. Make it clear that you'll provide refreshments, but guests are welcome to bring their own libations too. This way, people can show up with their preferred beverage without any pretense.

Borrow and get thrifty. Shop for serving items, platters and vases at thrift stores where you can often find good deals for less than $5 each. Better yet, borrow what you don't have. If you have to buy something new, try to invest in items that can be used again to reduce costs for future parties.

Break out your slow cooker. Slow cooking is having a massive resurgence thanks to updated recipes that are fairly effortless and healthy. Now you can serve a satisfying, warm meal for your guests with money to spare. From soups and stews, to pot roast and short ribs, the options are endless for creating meals that will wow your guests and stretch your dollar.

Shop wisely. Many major warehouse clubs and retail websites sell party ingredients in bulk. Also look for ways to substitute splurge items with cheaper alternatives. Choosing domestic versus imported cheese or making mulled wine with a cheap bottle of red (the spices and sugar cut the flavor anyway) can also help keep party costs low.

There are a million things to celebrate as the year comes to a close, but having an empty wallet at the end of if all is not one of them. Sticking to the party plan and making sure you don't overspend will ensure the end-of-the-year cheer will continue well past New Year's!

Hitha Prabhakar is a consumer spending and retail analyst and spokeswoman, the leading web and mobile money management tool that helps people understand and do more with their money.