It costs a lot more to eat, drink and be merry this Christmas season, putting a real crimp on holiday party hosting. Food costs, for instance, are expected to jump substantially. Consumers will spend an estimated average of $96.75 on holiday food this year, up 12% from last year, according to the National Retail Federation. They're also expected to spend more on wine, flowers and decorations.

Nevertheless, you can enjoy the season with family and friends and still stay on budget. Check out these money-saving strategies before your doorbell rings.

Host away from home

With the many restaurant deals available this season, you may find it's more economical to host your party outside your home. (Just think, no cleanup.) On the daily deal sites, for example, half-priced vouchers to restaurants or bars are common, says Jack Vonder Heide, president of Technology Briefing Centers, a market research firm. DealOn.com recently offered a $200 voucher to Finnegan's Wake, an Irish bar with locations in several cities, for $100. Of course, even $200 might not go far enough for a large or hard-partying group, but such a discount could still be reason enough to choose one location over another, says Vonder Heide.

 

Holiday Entertaining on a Budget

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Sarah Morgan on Lunch Break discusses money-saving strategies for throwing a bash this holiday season that you can still afford.

Shop smart

Savvy shopping can help hosts get around higher food costs. Overall food prices are higher this year, but the sale prices are often the same as last year, says Teri Gault, the founder of TheGroceryGame.com. Ham, for example, can be as cheap as 99 cents per pound on sale. Choosing to serve traditional goodies like cookies and eggnog can also help save. Stores often try to draw in more shoppers with discounts on holiday staples, says Stephanie Nelson, the founder of CouponMom.com.

Consider a caterer

Deal sites are offering catering packages at half off or more this holiday season. "We're seeing complete catering events, from soup to nuts, literally," says Dan Hess, the co-founder and CEO of DealRadar.com, which tracks local deals. For example, Rean Smith Catering in Connecticut recently offered a Groupon for a tapas appetizer party for up to 20 people for $250. That's 67% off the usual $750 cost. Be sure to check the fine print for restrictions, warns Hess. Some of these deals are only available on weekdays, for example.

If you go the catering route, ask your provider if you can time your event to take advantage of another party on the same day and piggyback that menu. It's often cheaper for the caterer to produce more servings of the same food, says Bonnie Fedchock, the executive director of the National Association of Catering Executives, a trade group. Ask if the savings can be passed on to you. And many caterers are cutting back on serving sizes for health reasons. If this applies to your party, ask for a discount. "I don't think most people think of it as a cost savings," says Fedchock, but serving less should mean spending less.

Buy wine in bulk

Bigger may be better when it comes to wine this year, says Gary Itkin, the general manager and buyer for Bottlerocket, a New York City wine and spirits store. More high-quality wines are now being sold in liter bottles, offering a third more volume than typical bottles, Itkin says.

On Wine.com, for example, a 1.5 liter of Fontodi Chianti Classico Riversa Cru Sorbo 2008 is $120. That's $30 less than buying two standard bottles at the regular $75 price. And don't look down on box wine anymore. Itkin particularly recommends the boxes sold by boutique New York-based wine importer Wineberry. They sell 3-liter boxes of high-quality wine at about $40 or $50 each. "They're estate-bottled wines in super-attractive wooden boxes with the real chateau label on them," Itkin says. "When you set out two boxes at a party, everybody digs them," he says.