Budgeting Tips to Make Giving Gifts Affordable

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Gift-giving can be a real budget-buster if you don't plan accordingly. It can also be expensive—the average person spends more than $600 per year on gifts for friends, family, and others during the holidays alone, according to the National Retail Federation.

You can make shopping for gifts much easier by developing a solid strategy. But the most important thing you can do is to develop a gift-giving budget and set money aside each month for that fund. Learn our tips on how to set a budget for gift-giving.

Planning Your Gift Giving Budget

It's important not to just pick an arbitrary number when you're planning your gift budget. You should take into account birthdays, anniversaries, and holidays such as Christmas. Determine how much you want to spend per person, then add those figures up to calculate your yearly gift budget.


Consumers prefer receiving gift cards over all other types of gifts, according to the National Retail Federation.

Once you determine your budget, add 15% to that amount so you'll be covered when those unexpected gifts come up over the course of the year. Divide that number by 12—that's the amount you'll need to set aside for your gift-giving budget each month.

Stretching Your Gifts Budget

If you'd like to give a gift that doesn't fit into your budget, consider splitting the cost of a gift with multiple people. This strategy is especially helpful for events like baby showers since many baby items can be pricey. 

Shopping Black Friday sales, purchasing gifts during the non-holiday season, and redeeming credit-card rewards for gift cards and merchandise can also help stretch your budget.

Office Parties and Birthdays

Office giving varies from office to office. You may have an office where you contribute a monthly amount to the birthday pool or an office where you are assigned a month to be in charge of birthdays.

It gets even trickier when it comes to holiday gift-giving in the office. Again, the office sets the tone of what you are expected to give. Don't be afraid to be vocal about a limit on gift prices, either. There are likely to be co-workers who want to stay on a budget, too.

Wedding Gifts

Weddings are another occasion when a gift is expected. You may be wondering how much you should spend and what you should give. A good rule of thumb is to give a gift that's equivalent to the price per head for attendees of the wedding, which varies but is usually around $100. 

You can also base your spending on your relationship to the bride:

  • $50 for acquaintances
  • $75-$100 for friends, coworkers, and extended family
  • $75-$150 for close friends and family.

If you are invited to a wedding shower or bachelor or bachelorette party, then you may need to increase your gift budget for this event, as a gift is also expected at these events. 

Holiday Gifts

A good way to budget for Christmas is to look at how much you spent for the last year and divide that number by twelve. If you save that amount each month, you can cover your Christmas gifts without too much stress.

But don't forget to utilize strategies to save on Christmas gifts, like buying discounted gifts before the holiday season even begins. Amazon Prime day is a good example of a non-holiday sale event that can help you stick to your budget.


A Christmas savings account is another way to make saving for holiday gifts easier.

Gifts for Special Occasions

You may have to give gifts for a special occasion or celebration. For example, christenings, baptisms, and bar mitzvahs are common venues for gift-giving.

But it can be difficult to know what to give and how much. Generally, the amount you spend will vary. But be sure to give an age-appropriate gift to young children, and perhaps switch to a cash gift for older children and teenagers. 


Birthdays can also be a big-ticket spend for your gift-giving budget, depending on the size of your extended family and their expectations. You may also have to juggle the gifts for your close friends.

It is important that you carefully consider how much you can afford, even if there are expectations of giving a certain amount within your friends or family. Sticking to your budget is more important than living up to expectations that may not be suitable for your financial situation. 

Don't Forget Unexpected Gifts

It is important to err on the side of over-budgeting funds when it comes to gift-giving. That's because there will also be an unexpected event that you will need to buy a gift for. 

In addition to budgeting an extra 15% on top of your existing budget, it also makes sense to have a few small gifts on hand for those unexpected events. Keep a nice bottle of wine, a few unisex children's toys, and even a few nice candles of small houseware items for those times.

And the next time you're invited to an unexpected party, you can show up, gift in hand, and have fun knowing that you didn't bust your budget in the process.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. National Retail Federation. "Winter Holidays Data Center."

  2. National Retail Federation. "Winter Holidays Data Center," Click "Demographics: Gifts."

  3. L.A. Banquets. "Wedding Gift Etiquette: From the Bridal Shower Down to the Bridal Party."

  4. Consumer Financial Protection Bureau. "A Five-Step Spending Plan to Avoid Holiday Debt."

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