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Create a Gift Giving Budget

by World of Finance on January 4, 2012

Did you spend too much on Christmas gifts this year?  So many people get caught up in the excitement of the holidays and wanting to please their spouses, children and extended family with gifts that they really cannot afford to buy without exhausting their bank accounts or credit lines.  It’s only after that they realize that the moment of satisfaction has passed and it’s time to pay the piper.  Everyone should have a budget in mind for each person and as a whole for Christmas gift giving.  The same should be done for all other holidays and special days throughout the year.

I have seen parents overwhelm their children with gifts during their childhood years conditioning them with expectations for the wealth of receivables for Christmas and birthdays.  I have seen children throw temper-tantrums when they receive a new clothing outfit, as they have been conditioned to receive so many toys.


The worst case scenario is someone I knew that would continuously spoil her nieces and nephews with gifts to the point that they related her to receiving gifts whenever they saw her and would have great disappointment when she came empty-handed.  For obvious reasons, this is unhealthy for children, but back to the focus of this article, a budget for gift giving is essential in controlling the out-of-control purchases for gifts.  One might think that spending a little here and a little there on gifts for every special occasion is harmless, but when totaling the balance spent for all occasions combined can be astounding.  Christmas seems to be the biggest problem for budget busting expenditures.


My recommendation for next year is to establish an over-all budget on MS Excel and then list all of the people on your list that you must buy for.  Then work everyone on your list, not to exceed your total budget.  You can include columns for all of the holidays throughout the new year, including Anniversaries, Birthdays, Valentines Day, Mothers Day, Fathers Day and Christmas.  This could be your annual budget for gift giving and a useful tool in maintaining your cost controls in this category.

Do you currently use a budget for gift giving?  Do you find it helps you control your spending?  If you don’t already have a gift giving budget, it’s never too late to start!

This article was written by Staff Writer Chad B. Butler.  He has always thrived as an entrepreneur during his various business ventures such as his auto detail business to more recently founding Landscape Depot Investments, a business brokerage firm.  In his spare time he enjoys writing, continued learning, and spending quality time with family and friends.

Image: photostock /

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22 Responses to “Create a Gift Giving Budget”

  • Great points! I have also found that your method works wonderfully to help teens learn to budget. They are usually excited to be able to do their own holiday shopping and it’s the perfect opportunity to teach some budgeting skills.

  • MoneyCone says:

    Christmas time should be treated as you would treat a big purchase and do some budgeting. Consumers spend about $715 in gifts alone during Christmas!

  • YFS says:

    I have a Xmax/Bday spot in the spending plan. I set aside a set amount every month for these expenses. I do not spend any more than what I plan for. If I don’t spend it all I throw it in my emergency fund. Works like a charm

  • Perhaps the way to handle this is to think back to your own time as a child. Whether you had lots of expensive toys or hardly anything, ask yourself the question – which toy did you really cherish and play with? Then estimate how much it actually cost whoever it was who bought it for you.

    Maybe you will be surprised. I often think back to the time when as a 3 or 4 year old I would stand at the sink on a chair and play with my navy – a set of bits of wood. Cost zilch. Enjoyment hours.

    You really don’t need the toys we are conditioned as parents and adults to give – make it simple.

    • @ John – I agree, too many people spend way too much on Christmas. Kids in general have so many toys that most of them just sit and don’t get used. The simple things can bring hours of enjoyment. :)

  • LaTisha says:

    I create a budget every year for Christmas and manage to break it each year. I even tried not shopping so early this year, but alas, Amazon delivered up to 2 days before Christmas. Recipe for disaster. Fortunately I didn’t go over that much and I had a Christmas fund. Next year I will be more disciplined…I think. :)

  • This is such an important point! For many years, my wife and I have prepared a special budget just for Christmas shopping. Keeping track of who you bought for and how much you’ve spent is the only way to keep your purchases from getting too out of hand!

    If anyone would like to download my ready-made Excel sheet where you can list your purchases and keep track of how much you’ve spent, please follow this link:

  • Niki says:

    I also create a budget every year for Christmas. I start saving in January and it make Christmas a breeze. I also started buying earlier last year and I was done with shopping only a third of the way into to December. It was awesome.

    • @ Niki – Congrats on being on top of it Niki. Sounds like planning took away a lot of the crazy holiday stress some people experience by waiting till the last minute.

  • 2011 was the first year I used a budget for Christmas. I saved from each paycheck all year long, and it was so thrilling to have the money available without using a credit card! I’ll be doing this every year from now on to make the holidays less stressful.

  • This is a good suggestion, because it can be easy to focus on family members and forget about friends you buy for too.

    I save about $50 each month throughout the year to make Xmas a bit less painful.

  • We just started a gift giving account! It’s a savings account where we put money into every month for gifts! unfortunately, it’s hard to build up since we have gifts in january and february!

  • I have a $500 Holiday Challenge to help me keep my gift giving under control. It helped a lot last year and am going to do it again this year.

  • I think budgeting for major holidays when lots of gifts need to be purchased for mass family members.
    You could set up a budget per individual or per house hold and see what works best.
    I think it would also depend on the relationship you had with the particular family/member.
    Preparing for anything that has to do with spending a good amount of money is always a wise choice.

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