Unemployment is up and consumer confidence is down heading into the holiday shopping season, so many consumers will be trying to stay on a budget this year. It's possible to celebrate on a budget, experts say, but it requires some thought and planning.

Jan Brakefield, assistant professor of consumer sciences at the University of Alabama, says one of the most important rules is to make a spending plan and stick to it. She also says how you pay for gifts is important, too.

"Pay cash. Credit card users typically spend twice as much money as others," Brakefield said. "Use the 'envelope method.' Prepare one envelope per person, placing money in each envelope. When the envelope is empty, you are finished buying for that person."

When you shop is also important. For example, don't shop when you're tired, as that may effect your resolve to stay on a budget.

"Holiday spending will put a big dent in most people's budgets because when they budget annually for such gifts, they usually don't reserve enough for the December timeframe," said Caroline Fulmer, who is also an assistant professor of consumer sciences at The University of Alabama. "For most of us, unless we set aside a special Christmas savings account, holiday spending causes us to tighten our belts on other expenses."

Fulmer suggests cutting back on the extras like dining out, entertainment, and extra clothing, then spreading that money among holiday purchases.

"Getting great gifts for your loved ones doesn't have to cost you your next paycheck," said Lisa Lee Freeman, editor-in-chief, ShopSmart, a publication from Consumers Union. "To save this season, follow our advice to uncover deals, avoid lousy merchandise and get great buys on everything from earmuffs to electronics."

Freeman offers these tips for saving money and staying on a holiday budget:

1. Start online.

Try on shoes and clothes for size in the store, and then look for them to go on clearance online. Check eBay first. Even if you skip the auctions and only buy items that have the "buy it now" option, you can save tons off retail.

2. Dodge hidden charges and unwanted merchandise.

Always check return costs and see if items bought online can be returned to a local store, especially for large purchases. If it's a bargain, grab it, but think twice about final-sale items.

3. Don't pay full price.

Before you check out online, Google "promotion code" and the name of the product to find additional savings. When planning a trip to the outlets, find printable coupons online for preferred stores. Request a price adjustment after you have made a purchase if you find a lower price in sale circulars or on sites like PriceProtectr.com that can track prices for you.

4. Shop when you're at your best.

Don't shop when you're exhausted: You'll be less likely to shop around and you won't pay attention to prices. Get dressed up when you go shopping. You will feel less desperate for a makeover and avoid blowing big bucks.

5. It never hurts to ask.

Don't underestimate your bargaining power, even at the doctor's office. Ask sales associates for advance notice of sales. Then shop the night before the sale and ask to have full price items put on hold until the sale starts.

6. Get the biggest bang for your buck.

Ask for freebies. For example, if you buy a TV ask for free delivery. If a salesperson won't budge on a price, see if you can negotiate an upgrade.