It has been a difficult year financially for many of us, and for most households money has been very tight. However, with Christmas upon us again it is time for many of us to try and get some money together to purchase our Christmas gifts for loved ones, which could prove stressful for those with little spare cash to splash around.

In response to the financial situations for most people, and the subsequent lack of spending, many shops have cut the prices on many items hoping to increase spending levels, which means that many of us could enjoy greater affordability than we had hoped this Christmas.The recent pre-budget report announced that there would be a 2.5 percent cut in VAT, and this could further help to reduce prices for consumers.

Make sure that you actually benefit from these cut price goodies by avoiding the moneymaking traps that many retailers use to part you with extra cash and boost their own profits, as otherwise you will lose the benefits of being able to get the discounts that shops are offering.

If you buy certain expensive products in your shopping such as electrical items or jewellery the retailer will most likely try to sell you insurance cover for the item. However, bear in mind that this could cost you unnecessary money, as you will find that these products are already covered under your home insurance, so you do not need any additional cover.Don't be fooled into taking extended guarantees, which is another extra that most retailers will offer, as this can be very expensive, and on many items simply isn't worth the cost. In fact, with low cost items you could far better replacing the item yourself if something goes wrong, and most items are covered by a manufacturer's warranty anyway for at least one year.

PPI, which stands for payment protection insurance, may also be offered to you but you need to exercise caution. You may find that you are not eligible to claim, so you need to check the terms and conditions, and you also need to remember that this cover could really cost you, so make sure that you shop around and compare deals from providers.Also, when you are doing your Christmas shopping you will often offered store cards by many retailers. You should be very wary about these. In the current climate, after a long winded application process at the tills, you may be turned down anyway, which can knock your credit. In addition, if you do get the card and spend on it you will be charged extremely high rates of interest if you spread the repayments on the card.

You should make sure that you are not taken in by the sales patter of persuasive staff members, as the reason they try and sell these extras is because they can make a lot of money from selling them. You, as the consumer, on the other hand will be paying out money for products or services that you may get little or no benefit from.