The two most important things we need to do to survive the tough economy is to focus on building up emergency savings and paying down credit card debt. However, with the economy still dependent on consumer spending as a driver and source of jobs, the pressure has already started to get us to start our holiday shopping and to spend as much as possible. The worst possible thing you can do with the economy in such a mess is to go  into deeper debt by using credit cards to spend money we don’t have. Here’s what you need to do to keep that from happening:

MAKE A LIST of every person you plan to buy a gift for, along with the amount you plan to spend on each person. Whether shopping for Christmas gifts, gardening supplies or groceries, never shop with out a list. Shopping from memory usually results in impulse buying, causing you to spend more money without being conscious of it.

REVIEW YOUR LIST. You’ve made your list; now do like Santa and check it twice. Focus on cutting people from the list, and/or reducing the amount budgeted for each gift.

Don’t worry; you don’t have to be a Scrooge. For example, some people on your list may appreciate a card, or even a phone call as much as or more than they would a gift. Are there individuals on the list from the same household? Buying one family gift instead of several individual ones will allow you to buy fewer gifts while still spreading holiday cheer. And be creative about giving gifts that cost little or no money; gifts of time, service or experiences. Examples include six weekends of babysitting so that your brother and his wife can keep the home fires burning; or agreeing to mow your favorite aunt’s lawn every two weeks for the new year, so that she won’t have to pay someone else to do it. If you have a gift, talent or hobby, consider gifts you can make yourself.

PAY CASH ONLY. When you’ve added up the total cost budgeted for your revised list, commit to funding the purchases without borrowing money—meaning without using credit cards. This is a good idea in any economy, but it is crucial to stick to this rule during the current financial crisis. This is the worst possible time to max out your credit cards; you want to keep your credit card balances as low as possible, ideally below a third of our credit limits. By paying cash only, you will be no deeper in debt once the New Year rolls in, and won’t be paying interest charges all the way to next Christmas.

If you can’t pay cash only, REPEAT STEP 2 until you can.

Am I saying, “Cancel Christmas”? Of, course not. However, unless you want to court further financial disaster, you must focus your holiday shopping strategy on 1) being organized and 2) resisting the pressure to borrow or spend money you don’t have.