Why I Stopped Budgeting for Gifts to Save Money

Many people ask how much they should budget for gifts. This way of thinking can be dangerous. If you have a budget, you are likely to spend all that you had planned, and probably more. Instead of making a budget, I found it helpful to make a list and stick to it. A good rule for kids is one thing they want, one they need, one to wear, and one to read.

Presents have been a large part of my family’s holiday celebrations. But I am a minimalist. Stuff (especially stuff I don’t use or love) causes me stress. Not being able to pay my bills in-full also causes me stress. And I tend to go over budget on Christmas gifts.

I don’t express my love by buying things. In fact, more toys may even be doing kids an injustice. They will grow to want and expect more rather than being grateful for and happy with what they have. Furthermore, research has shown that fewer toys is associated with more creative play and longer play time.

I’m not against presents or toys. But I am against excess. Anything not used or loved is a waste of resources, time, and space.

Last year, I tried something new for my kids: one thing they want, one they need, one to wear, and one to read. I was so excited to show someone the gifts I bought my children. But after I showed them their reaction was “That’s it? I think you need to get them more.”

My heart sank.

Between myself and their grandparents, my kids were getting everything on their lists (plus more).

Holiday Spending

According to Nerd Wallet’s 2017 Consumer Holiday Shopping Report, more than half of people who shop during the holiday season incurred credit card debt. Many people spend all or more than they had budgeted. Only 5% of people who had a holiday shopping budget spent less than their budget

This makes sense. If you have $650 budgeted (which is what the report found most people planned to spend), you are going to try to divvy it up between the people you love.

Typical Approach to Budget

When I became a parent, I tried setting a dollar amount for a budget: $X total and $Y for each child. The problem was, one kid would want high-priced item while another kid wanted a less expensive item.

So does one child get one big present while the other kids get lots of less expensive presents that add up to the same dollar amount? Or do I try to be “even” on both amount spent and number of gifts?

Either way I’d be spending too much money or buying kids stuff they don’t need or want just to be “even.”


This is how most people budget.

Average Budget (based on Nerd Wallet’s 2016 figures) $650
Kid 1 -$200
Kid 2 -$200
Spouse -$100
Mom -$50
Dad -$50
Niece -$20
Nephew -$20
Baked treats for family/friends -$10

As we all know, it is difficult to find items that are exactly this amount, and chances are we go over budget. Plus, you may notice a number of people missing from this list, such as step-parents, additional children, or teachers.

List the Alternative

Trying to budget an overall dollar amount and also spread it “evenly” across groups of people (e.g., parents, kids) and buy everyone something they truly want is a difficult feat for even the most savvy shopper.

Instead of focusing on creating a budget, experiment with creating a list of one thing each person would want and that you can easily afford without putting it on credit. Then find the best deal on that item.

If you cannot afford to pay cash for all the people on your list, consider substituting store-bought presents with baked treats or hand-made gifts.

For your children, limiting them to 4 gifts each.

Want, Need, Wear, Read List

Instead of creating a budget, last year I tried something different. Instead of creating a budget and buying as many things as I could within that budget, I created a list of 4 things for each child plus stocking stuffers. Then I stuck to the list and looked for the best deal on each item.

Jordan Harrell wrote about this in her 2016 series. The goal, Jordan says, is to take the emphasis away presents and material things when celebrating birthdays and holidays.


The want is something that the child asked for. For the youngest two, I chose their want based on their interests.


The need is something that I thought they needed. Last year, my son had outgrown his bike helmet and my daughter didn’t have one yet. One day while in the store we happened to purposely walk by the bike section. After my son walked by he naturally mentioned which helmet he liked. As my husband took the kids off to get groceries, I snuck back and purchased the helmets (they’re used to me wandering off in stores, so this didn’t raise their curiosity).


All three of my kids get excited about receiving new shoes, so this category was easy.


My house has enough books to fill a library. However, I believe my children need to improve their writing skills. Some teachers are concerned that with so much tablet screen time, young children are not developing the fine motor skills they need to grasp a pencil or hold scissors.

For this category, I chose to get my oldest two kids notebooks ($1 each) and age-appropriate writing instruments.

My youngest child eats books and crayons, so we did not get him anything from this category last year.

The list for my 3 kids looked like this:

Kid 1: School-aged
Want Survival watch $13
Need Bike helmet $15
Wear Sneakers $35
Read/Write Notebook & pencils $2
Stocking Fidget Spinner (on clearance) $3
Minecraft eraser $1
Flashlight $3
Electric Toothbrush $8
Candy and Treats $12
Total $92 
Kid 2: Pre-schooler
Want Light-up Doodle Pad $20
Need Bike helmet $15
Wear Dress Shoes $20
Read/Write Notebook & crayons $3
Stocking Markers $4
Coloring book $1
Flashlight $3
Electric Toothbrush & Toothpaste $10
Candy and Treats $12
Total $88 
Kid 3: Toddler
Want Stackable O-ball set with toy car $10
Need Teething toy $7
Wear Shoes $10
Read/Write N/A – he eats books $0
Stocking Toothbrush $3
Toddler Treats $12
Total $42

In addition to these gifts from their parents, they also received gifts from their Grandparents and Aunties (including a drone, tablets, walkie-talkies, and their own age-appropriate subscriptions to Highlights magazine).

They received everything they wanted, and more.

Most importantly, they loved and played with everything they received. Nothing was shoved into a drawer or forgotten (well, I haven’t seen the fidget spinner in a while, but we were expecting that).

If you’re wondering about what I do about gifts from Santa, he doesn’t come to my house. But that’s a story for another day. For families that do believe in Santa, he follows the 4 gift rule as well.


How many presents will you be buying? Will you be sticking to your budget, or to your list?

You May Also Like:

7 Things I Don’t Buy for the Holidays

10 Things I Don’t Buy My Kids (and 10 Things I Do Buy Them)

Reasons to be Thankful: How the Other Half Really Live

10 Gifts that Save Money

8 thoughts on “Why I Stopped Budgeting for Gifts to Save Money”

  1. “Stuff (especially stuff I don’t use or love) causes me stress.”

    So true! Three times I’ve worked with other family members to empty out deceased grandparents’ houses. These were people who lived through the Great Depression and kept everything.

    The lesson learned for me is that I will not do that to my children.

    1. Great point, Brian. I work with a lot of people at end-of-life and see what it’s like for their families to go through their possessions. I often think of who will be going though my stuff when I’m gone. Completely agree that I do not want to put my family through that. I’m glad to hear I’m not alone in that, Brian!

  2. I love this. I also buy most of the kiddo’s Christmas presents from the thrift store, so a fraction of the “‘new” price. That, and we just do what fits in his stocking to keep it simple. Though as he’s getting older I’m considering ONE present beyond the stocking. Either way, very reigned in from what everyone else says we need to do.

    1. I LOVE the idea of sticking to only what fits in the stocking. That’s a great idea that I hadn’t tried before. Yes, it’s hard to take a different approach to what everyone else is doing. But I think that our children will become more grateful people because of it. What a great suggestion Angela!

  3. We’ve been doing very well in the last five years as far as spending money on gifts. We still have a budget, but my wife found a few stores a few years ago, and she always buys her gifts from those. Not sure if she’s merely getting better at shopping, but we’ve been saving a comfortable 35% off our budget. And no, she doesn’t go to thrift stores.

    1. Hi Moneylogue! Saving 35% off your budget is GREAT! That’s wonderful that she’s found a few places where she can get gifts for everyone and save money. And I’m with you on not shopping at thrift stores.

  4. I love this idea! I just pitched it to my spouse for us. We both love gifts, and I love the idea of getting one in each category, which takes out some of the guess work (we’re both TERRIBLE gift givers… sorry any future kids, haha!)

    1. Hi Moriah Joy! Yes, the want, need, wear, read can work for anyone and can really help take some of the stress out of gift giving. Thanks so much for your comment!

Leave a Reply

Your email address will not be published. Required fields are marked *