Around this time last year, CNBC polled American adults and learned something really depressing: “28% of credit card users are still paying off last year’s holiday debt.”

There’s no faster way for the holidays to go from holly-jolly to bah-humbug than still paying steep credit card interest on last year’s gifts. Thankfully, there’s a better way.

Better gifts that aren’t cheap

When you hear this advice, you’ll probably laugh: “Make your own gifts.” These often get a bad rap because some people think it’s just a cheap way out of buying expensive gifts. And they’re right.

But these gifts can be amazing because they’re personal. If you can knit a sweater or build a jewelry box, those will be treasured items for years to come. Don’t forget, your gift is one of many. Your friends and family are going to get lots of store-bought presents, anyway. Why not make yours special?

If you can’t make a gift, you can probably assemble one. It’s usually much cheaper – and a lot more fun – to make your own gift baskets for friends and family you know well. They’ll enjoy them, too, because you know what they like. Whether it’s their favorite brand of chocolate, their preferred coffee, or incense and candles with their favorite scents, this assortment of little things add up to something big.

Give favors, not gifts

Sometimes the best gifts aren’t tangible. Time is something money can’t buy, but something you can give to loved ones. These are practical favors like babysitting or pet-sitting, helping with a home renovation project, or even planning a trip for them.

This one is especially good for the kids. Have them give out personal coupons for cleaning the yard, shoveling snow, washing the car, and other chores that often require a lot of nagging. Instead of them begging you for cash to buy you gifts, you’ll save your money and teach them the value of not only a dollar, but also of work.

Likewise, you can sprinkle in such coupons for your kids, promising them a free trip for ice cream or one free pass on making their bed – whatever will brighten their eyes doesn’t have to lighten your wallet!

How to stick to your holiday budget

Making a budget probably isn’t your idea of a good time – even for a pleasant task like showering everyone with gifts. But it’s crucial if you want to do holiday shopping right. Fortunately, it’s not hard. In fact, it’s pretty simple.

The first step is making a list and checking it twice. Exactly WHO do you need to buy gifts for? Really put some thought into this, because you’re making a promise to yourself that this is it. You’re not buying anything more for anyone else. We’re not yet talking WHAT you’re going to buy these folks, just that you want to – or in the case of a boss, maybe need to.

The next step is figuring out how much to spend. Even now, we’re not talking about how much you’ll spend on EACH person. We’re looking for a total. Over the years, studies have consistently shown something interesting. In general, people who don’t go deep into debt spend around 1.5% of their gross annual income on holiday spending.

Here’s how to figure out this important number. Simply take your annual salary and multiply it by 1.5%. So if you earn $40,000 a year, that’s a holiday budget of $600.