If you’re feeling the pressure to find the perfect gift for a special occasion, you’re not alone. Maybe it’s because you’ve gone a little overboard with buying gifts in the past, and it took half the year to pay off the robot vacuums you bought for your family last holiday season. Or it could be that you were hit with invitations to five weddings, three graduations, and countless birthday dinners over the summer and your bank account is still feeling the pain.
Whatever the reason, if the thought of buying another gift isn’t bringing you joy, it’s time to pause and figure out why. Do you feel like you’re overspending on gifts? Are you unsure about what’s even considered an acceptable amount to spend? Or maybe it’s that the process of choosing something is overwhelming.
“Providing material possessions is a way that we show love and care,” says Bright Dickson, happiness expert and co-host of the Money and Mindset podcast. “There’s nothing wrong with that; that’s a part of life. But sometimes, when we feel like we can’t show care in other ways, we might be tempted to show our love through gifts. It’s compensation for time that we haven’t been able to spend.”
So how much do you really need to spend on gifts? These steps can help you figure out a budget and keep your spending in check.
Step 1: Remember that gift-giving suggestions are not rules.
There are plenty of customs and etiquette guidelines on gift giving, but those guidelines may not always align with your budget—and that’s OK. Before you get too caught up in what etiquette says you should do, take a look at your checking and savings accounts to determine how much you can comfortably spend on gifts. Ensure that whatever you want to spend isn’t cutting into your emergency savings or money you need to cover necessities like your rent or mortgage, utility bills, or car payment.
So, how much is too much to spend on a gift? Once you know your budget, these guidelines can help you have an easier shopping experience.
- How much to spend on birthday gifts: It’s generally considered acceptable to spend between $15 and $30 on a casual acquaintance or co-worker or if you’re buying a gift for a birthday party your kid’s attending. But if it’s a birthday gift for a close friend or family member—or for a milestone birthday, like turning 18 or 75—it’s not uncommon to spend in the $50 to $100 range.Disclosure 1
- How much to spend on a wedding gift: Wedding planning experts say $50 can be an appropriate gift amount for a wedding, but that people tend to spend more the closer they are to the couple getting married. A survey from The Knot found that the average amount guests spend on wedding gifts is $160, but that guests spend an average of $200 for close friends.Disclosure 2 Don’t feel pressured to buy an expensive item on the registry. You can choose a gift that suits your budget—or look for opportunities to donate an appropriate cash amount to the couple’s honeymoon fund!
- How much to spend on holiday gifts: A survey by PwC shows the average shopper expects to spend around $786 on gifts for the holidays this year.Disclosure 3 How much should you spend for each person on your shopping list? That depends—and it’s why you’ll want to create a budget. (See Step 2 for tips on setting up your gift budget.)
Keep in mind that these ballpark numbers are not rules for how much you need to spend—everyone’s situation is different, and what matters most is the thoughtfulness and intent behind your gift. And when people forget more than half of the holiday gifts they receive,Disclosure 4 why put that pressure on yourself to spend?
Step 2: Set up your gift budget.
You’ve checked your accounts, expenses, and cash flow, so you know how much you have total to spend on gifts. Now, it’s time to create a more detailed gift budget.
Having a firm budget in place is the most straightforward way to avoid overspending—and the stress that comes with it. “You have to say, ‘Look, this is what I’ve got to spend and when it’s done, it’s done,” says Brian Ford, head of financial wellness at Truist and co-host of the Money and Mindset podcast. “My gifts need to fit within this budget because I know that’s what’s right, and I think that’s what [the gift recipients] would want for me as well.”
For the holidays, setting up your budget per person can be helpful, since what you’ll spend on your significant other is likely more than what you’ll spend on your co-worker, for instance. And when you have a list of all your gift recipients, you may realize that it needs to be shortened. Don’t feel bad if you need to skip your neighborhood’s Secret Santa this year—or if you buy joint gifts for couples or families instead of individual gifts for each of them. You could also consider opting for a simple but heartfelt handwritten card for some of the people on your list.
Read more: Guide to budgeting: 4 ways to get started
Step 3: Be open and transparent.
If you’re feeling overwhelmed about spending on a gift, simply chatting about gift spending limits can be incredibly helpful. If you’re comfortable, talk to your family or friends about gift budgets. For example, you could ask people to stick to a $25 budget when they exchange gifts with you on birthdays or holidays. Even if they don’t abide by the limit, at least you’ve set an expectation for yourself.
“You can’t necessarily tell people how to spend their money,” says Dickson. “But what we can control is ourselves. So you can still meet your own boundary.”
Another tactic for holidays and birthdays is to ask for a wish list, so you can pick a gift they actually want within your predefined budget and avoid spending money on something they may not want.
Step 4: Take the pressure off yourself.
Put gift giving in perspective and think about the gifts you’ve received in the past few years. “I don’t remember what anybody in my family gave me last Christmas. And my guess is that they’re the same,” Dickson says. Reflecting on the reality of your own memories can help ease the pressure of finding the perfect gift.
Ford agrees. “Most people put too much pressure on themselves when it comes to gift giving, and that pressure is typically internal,” says Ford. “You’ve got to realize that gifts are more about relationships than they are about the stuff.”
5 simple ways to save on gift giving
Feeling more confident about how much to spend on a gift—but still challenged by your budget? These tips can help you save money when buying gifts for different types of occasions.
1. Suggest a Secret Santa for your family or friend group. That way you’re just responsible for buying one gift. Bonus points if you set a price limit.
2. Make gifts. Handmade ornaments, baked goods, and even handwritten cards can all be memorable and cherished gifts. (Dickson says she made paintings for each of her family members one year.)
3. Donate in lieu of a gift. Can’t find something good that’s within budget? Consider donating to a charity you know your gift recipient appreciates.
4. Use credit card points or gift cards to help pay for gifts. Gift recipients will never know how you paid, and your bank account won’t take a hit.
5. Go with gift cards. It’s impossible to go over budget when you’re setting the limit on a gift card.
The most important rule when it comes to how much to spend on gifts is to spend within your means. Giving a gift should bring joy—not financial stress. If you budget for your gifts, are open about how much you can spend, and take some of the pressure off yourself, then you can find ways to show others you care without overspending.