How Much to Spend on Christmas – Everything You Need to Know!

Oct 28, 2020 | Budgeting, Holidays

We all want to make Christmas magical for our family. But the tricky thing is figuring out how much to spend on Christmas. We're here to help you create a magical Christmas without buying ALL the things.

Woman holding Christmas lights and money, from Fun Cheap or Free

This time of year I regularly get questions such as, “What should I spend on Christmas?” “How much should I budget for Christmas gifts?” and the kicker, “How much should I spend on my kids for Christmas?” Truth: those are dang hard questions to answer. BUT I take pride in being the resident “I'll talk about things people really don't want to talk about” mama, so here I am to do my best. Be prepared folks, this post is a long one, but it's worth the read!

Today I’m here to help give us all some guidelines for “safe spending” this year! While I focus mostly on gifts for our children (since that tends to be our greatest Christmas expense), these concepts really can apply to any of us, in any situation.

I'm sure we can all agree that the true meaning of Christmas doesn't involve gifts. Amen to that. BUT I'm sure we can also agree that gifts are part of what makes Christmas so magical! I mean, we are human, aren't we? Here are a few ideas that will hopefully help us from going overboard this year, especially for those whom we love to spoil the most…our kids.

I mean, come on, how can we NOT spoil these cute sonofaguns??

Page family kids outside, from Fun Cheap or Free


Here’s what we’re going to cover in this epic Christmas post:

  • WHAT? Balancing WANTS vs NEEDS, dealing with kids’ wish lists, and giving our kids a fabulous Christmas without spoiling them rotten or getting caught up in the guilt trap!
  • WHY? Why we shop the way we do and how to change our mindset to focus on what matters most at Christmas time.
  • HOW MUCH? Guidelines and numbers to help you make your Christmas budget work. Boom, baby!

So, let's get started already!


Before you even ask your kids to make a Christmas list, you first need to:


Put a number to it. Look at your income, savings account, and financial situation. Look at how much you have leftover at the end of the month. You will probably need to set money aside for several months prior to Christmas, just FYI. We keep that money in our “family regular savings”.

If you can afford $1,000 this year, then decide if you really want to spend it all on Christmas. If it's $300, there you go. Many of us spend without keeping track. But when you stop and add it up, you might say “$2,500 for Christmas? Heck, we could redo our kitchen floor for that! Honey, we're cuttin' back this year!” Decide this first, then you work backward from there, and everything will be much, much, much easier.


Hand writing on holiday budgeting envelope, from Fun Cheap or Free

Just because it's Christmas doesn't mean you should disregard price tags on things other than gifts. Tracking your budget(s) is super important this time of year! So much so that we have a whole post about budgeting for the holidays. Divide up your budgets:

  • Gift Budget – This should include neighbor gifts, teacher gifts, stocking stuffers, gifts for your kids, family gifts, homemade gifts, etc…
  • Travel Budget – Even if it's to Grandma's house for a weekend, add it up!
  • Family Activities – Concerts, skiing, riding the Polar Express, etc. (Check Groupon for the best deals on these!)
  • Miscellaneous – Christmas cards, decorations, etc.

Once the preliminary work is done, it's time to shop for the kiddos! Before I give you numbers and parameters for what a reasonable amount is to spend this Christmas — ask yourself THREE important questions:


When I say “need”, I mean not giving them more than is reasonable or necessary.

“But my kid isn't asking for socks for Christmas, so nothing on their list is a ‘need' item.”

Smart kid! Trust me, there's nothing wrong with toys, electronics, expensive perfume, or other indulgent items. Please! Please do not only buy underwear and toothbrushes for Christmas. That would be, like totally lame, mom.

The mindset I want to change here is…our kids don't need everything they want, and they certainly don't need the nicest, finest things in life. They are kids, for goodness sake! Certainly try to get them what's on their list. Maybe they need T-shirts, but do they need designer brands? No. Maybe they need entertainment. But do they need an iPad? Heck no.

Maybe they need new shoes, but do they need top-of-the-line, hot-off-the-press, designer shoes? No. Maybe it's time for a cell phone. But do they need an iPhone? No! Maybe they want a $130 American Girl doll. But do they need it to be American Girl? No! There are knock-off brands that are beautiful and fun that will entertain them all the same. Our kids don't need the things we cater to 99% of the time.

“But the only gift they want costs more than their budget allows.”

Easy. Let them choose. First off, have your kids prioritize their Christmas list. Have them decide if they would rather have one big gift, or multiple little gifts. It's okay to make it clear that you have a Christmas budget. You don't have to tell them what it is, exactly, but if their wish list includes expensive gifts, let them know “Honey, your gift is outside of your Christmas budget (or Santa's budget) this year. Would you like me to surprise you with other things on your list, or do you want the money so you can have almost enough to buy it yourself?”

Or, figure out how to make it fit within the budget! Buy off-season. Buy at a discount (daily deal sites like Groupon have amazing deals on items). Simplify. Buy used. Even if you can afford it… Stick to your Christmas budget! It's a great way to teach your kids to be smart and to appreciate an item's value and not just the price-tag.

“But I can afford it”.

This is the HARDEST one. Trust me, life was much easier when we had no money. Now that we make a steady paycheck, saying no is so hard! But just because we can afford it, doesn't mean we need to. For one, it's not doing our kids any favors. Giving your child everything they want is only setting them up for a hard life. It's setting unrealistic expectations for their future that are incredibly hard to undo.

Can you imagine how hard it will be for them to get a job if they don't know how to work for what they need in life? Can you imagine how hard their first…oh…50 years of marriage will be when they're used to getting everything they want? Please don't do that to your child, it's really not fair to them.

You work hard for those dollars so that you can afford it! Don't waste them on an unnecessarily high-end item that your kid won't even like 6 months down the road! Take those extra dollars and pay down debt. Put it toward a family vacation. Build up your savings. Fix up the part of your house you've been putting off for 12 years. Put it away for your kids' college educations. Save those dollars for something greater.

“But it's Christmas.”

I won't deny that Christmas is the one time per year that it's nice to buy our loved ones special things that they want and wouldn't buy for themselves. But don't lose sight of the bigger picture in your life because of a holiday. Keep focused and make your family a priority. Set goals as a family and work toward greater things. If you aren't careful, a single Christmas can set your family back by several years. No, not exaggerating, and no, I'm not talking about a lavish Christmas either.

By all means, enjoy Christmas! Make it the best one ever! But you don't need to use your dollars to make that happen. Put some thought, heart, and creativity into it and you won't need to spend a dime to create the greatest memories for your loved ones.

“But they'll be so sad to not have it.”

Maybe. I'm sure there were many Christmases in my life where I didn't get everything I wanted on my list. And guess what? I can't remember them. Use it as a learning experience! If they are disappointed, “I'm sorry you didn't get that present, honey. But guess what? I need help cleaning out the garage this week, and I bet you could earn enough money to go buy it yourself!”

Just because they don't get it for Christmas doesn't mean they can't have it at all. Teach them how to work for it and save up for it! This lesson will give them a gift far greater than the item they are buying.


Warning, I'm about to go a little Dr. Phil on you. We are digging deeper to the why of the matter. Ultimately, if you can't figure out the root of why we overspend, we will never be able to overcome the issue. So, as hokey as it seems, please take some time to really ponder these questions!


Father pulling daughter in snowy sled, from Fun Cheap or Free

Most of what we give our kids aren't out of necessity. So why, then? Why are we spending our hard-earned money on this item that they don't even need? This is an important question to ask yourself because once you get to the bottom of it, it might help make your gift-buying decisions easier.

“Because I love them.”

I don't know about you, but I love my kids with such ferocity that it almost hurts sometimes. As parents, naturally, we want what's best for them. We want to see them happy. We love the look on their faces when they are introduced to something new and exciting.

But really, at the end of the day, is showering them with gifts what will truly-madly-deeply show your love for them? I'm sorry to say but no, no it won't. While gift-giving and receiving is in fact a love language, chances are your child won't know you love them more or less, based on the physical items you give them one day a year.

Solution: Spend Quality Time Together Instead

I challenge that there are 10,001 better ways to show love to your child. Ways that will last in their memories far longer than it takes to open a gift.

  • Shovel snow with them.
  • Take them on a date.
  • Go shopping for a Secret Santa family together.
  • Read a book together.
  • Write a book together.
  • Talk to them, making eye contact.
  • Take a class together.
  • Teach them to cook.
  • Find out what their interests are.
  • Tell them why you love them.

I hate to say it, but using money to show your kids how much you love them is an easy out. Sure, it can help and it sure is fun! I'm 100% on-board with giving gifts! But if you're going overboard on gifts because you want to show them love, I suggest you put away your wallet, turn off the TV and cell phone, and prove to your child you love them in a way that matters more.

“Because I want to create memories.”

Valid. To me, the most important part of Christmas is traditions and memories. But…I have spent hours upon hours on this post, much of the time racking my brain trying to think back to my own Christmases growing up. To be honest, I can't remember more than four or five gifts from my childhood. Total. (No, not exaggerating.)

Family decorating Christmas tree, from Fun Cheap or Free

The memories of Christmas that come back to me are of my family driving through the lights, hanging out the windows in our PJs. Cutting down our own Christmas tree, and complaining the whole time. Hanging our own ornaments. Playing out the nativity at our neighbor's house every Christmas eve, with me always stuck playing a sheep.

I can remember a few things I got for Christmas last year, but only because Bubba helped me remember. But the year before? I'm at a complete loss. Please don't rely on gifts to make memories for your family. Because in the end, the gifts just won't stick.

“So they like me more; makes me a cool parent.”

Many of us would have a hard time admitting this one, but isn't it true? I absolutely LOVE when my child thinks I'm the greatest thing on the planet. For those with teenagers, it's harder than heck to get your kid to realize how cool and hip you are! Can I get a holler from my fellow uncool parents out there?!



We all strive to connect with our kids, especially our teens. Thus, many of us do this by way of giving cool, hip, trendy gifts. And, I'll call it like it is, sometimes buying your kid something really cool, hip, and trendy will in fact endear them to you! (darn it all…)


…giving them everything they want is not what's best for our children. Go back to the “because I love them” point and re-read that. If you want to connect with them, do it. But do it right. You don't need to break the bank and overspend to accomplish an invaluable connection with your kids.

“Because all my other friends bought it for their kids.”

The only way to make a difference in the world is to stop trying to be just like it. Be unique. Be different. If you spend your life living by everyone else's standards, you'll look back on your life and have a hard time seeing anything but regret. Social awareness is very important, don't get me wrong. But at the same time, I urge you to let go and decide to not care what everyone else thinks. I promise you'll be all the happier for it!

“Because it's Christmas, and it's special, and I want them to enjoy it.”

The most poignant Christmas I ever had as a child is the one where I was in middle school. My family all went shopping together and filled a huge moving box full of clothes, food, and gifts for a family in our small town. We were giddy for days leading up to the oh-so-important doorbell ditch mission.

We loaded the box onto the back of our truck late one night, turned off the truck lights, and we kids jumped out of the truck and ditched the box on the doorstep of an unsuspecting family. It took all three of us to carry it. We snuck quietly to the door, carefully set the box on the doorstep, hearts pounding. We made our oldest brother ring the doorbell because we were all afraid to do it.

Ding dong!

We ran like maniacs, jumped into the back of the truck yelling to my parents in the cab, “Drive! Go! Move move move!” There was a feeling of elation and satisfaction like I had never felt before…and not just from the thrill of not getting caught. It lit a spark in me that had never been before.

I remember seeing some of the “secret Santa family” kids at school, and always feeling a little jolt in my heart while trying to hide a sneaky smile on my face. It felt so good that we anonymously helped someone in need…and pulled it off with McGiver-like execution.

That same Christmas our garbage man had to do his round on Christmas morning. When he pulled up to our house, my dad had us sprint out in the snow and hand him $100 and a huge box of chocolates that someone gave our family (one of a bazillion). He choked up as he took the money. I can remember it with intense recollection, even to this day. It was the greatest Christmas of my life…and I don't remember a single present I received that year.

That, my friends, is how you make Christmas special. You stop focusing on yourself, and turn the tables to those who need it more. Stop focusing on how much you think you should spend on Christmas. You give your family wonderful, beautiful gifts…within reason...then you focus on giving them gifts (life lessons, memories, and experiences) that will stick with them forever.

I encourage us all to hold back a touch. Focus on what matters most. Save the extra, and give it to others, or use it to provide a better life for ourself and for others. Let us teach our kids the value of sharing with others, the power of delayed gratification, and the reality that we just don't get everything we want handed to us in life.

Give them the best Christmas of their lives, by allowing them the opportunity to give.

And now, the moment you've all been waiting for… “HOW MUCH” you should spend on Christmas and how to do it in an organized way! 


Woman sitting on bed with laptop, from Fun Cheap or Free

This is the golden question, isn't it? Unfortunately there's not a magic calculation that works for every family. Age of kids, family income, time of life, traditions, it all factors in. That being said, it's absolutely imperative that you set a calculation for your own family and abide by it!

A few years ago I started budgeting by price. That worked okay, but a few years ago we tried something new that has worked well for us! Instead of budgeting by price, our kids now get one gift from us and one from Santa.

I know it doesn't sound like a lot, but when you add grandparent gifts, neighbor and friend gifts, aunts, uncles, cousins, even babysitter gifts…our tree is EXPLODING with presents!

We found that when we budgeted by DOLLARS we were more focused on the price of each item, than on what they really needed. Plus, we were overspending on some kids and underspending on others. By focusing on just ONE gift from us and ONE from Santa, we narrow it down and buy the best gifts for them, and really focus on those.

In our house, those two gifts still fall within the budget listed below in our family, but it does level out better because my oldest tends to get more expensive gifts than my 2-year-old, so it averages out nicely.

For example: One year, we got our two year old a cute singing picnic basket toy from Target for only $12.99 (plus 20% off using their app), and a princess baby doll between $15-$20. That means we were only spending $31 or less. Our budget for her was $50, so that extra $19 could be put toward another child's gifts.


Little girl holding present sitting in front of Christmas tree, from Fun Cheap or Free

Last year on Facebook, a post from a single mother went viral. She was pleading with the world to stop allowing Santa to give the most extravagant, expensive gift for Christmas. She said something to the effect of “How do I explain to my little boy why Santa gives some kids Xboxes, and he gets socks? Please mothers, let Santa gift a modest, practical gift, and take credit for the extravagant gift; have it be from mom and dad.”

That really struck me. So now, we give the bigger gift, and Santa brings the smaller or more practical one. A little Freebs food for thought for ya.

Moving on!


The first step is to decide how much you can afford for Christmas (not just gifts), then work backward, as mentioned before. Let your finances decide your kids' gifts, not the other way around! I recommend setting a budget for your entire family, then dividing out from there, and I recommend doing so by age.


These are simply recommendations and can definitely be modified to fit your family's budget!

  • 0-4 years – $50
  • 5-10 years – $75-100
  • 10-15 years -$100-150
  • 16-18+ years – $150-250

Don't forget the stockings! We've got a whole post over how to set a stocking budget, so don't miss out on that. In all, I don't believe stockings should be for gifts! They should be for simple things like treats, toothbrushes, travel toiletries, a magazine, chapstick, etc.


Little girl giving grandmother Christmas present, from Fun Cheap or Free

Once again, these are simply recommendations and can definitely be modified to fit your family's budget!

  • Grandparents – $35-50 each
  • Parents – $50 each
  • Extended Family Adults – $25-30
  • Extended Family Kids – $15-25
  • Friends – $5-10 family gift
  • Neighbor Gifts – $1-2 each

When gifting to friends and neighbors, get creative and find ways to cut back on costs while still making them thoughtful and meaningful.

See all my neighbor gift ideas for some great ideas! We give gifts to 100+ neighbors, so we keep it frugal. If you give to only a few, modify your budget. Just make sure that you don't spend over your Christmas budget!


  • Borrowing from Budgets is Okay – If your 2-year-old only needs one toy that's $14, you could use the rest of her budget for your older kids if needed.
  • What About Clothes? – I, personally, am not a believer in buying your kids clothes for Christmas unless that's specifically what they want on their Christmas list. We use Christmas and birthdays for the two times per year where I can actually give my kids fun-only items. I buy their clothes throughout the year as I see them come on sale, using my weekly “other” budget. I always have more than I need because I buy one year ahead as seasonal items go on clearance.
  • Remember VALUE and PRICE are Different – When you look at $75, you might think, “but that won't even cover the one bladiblah my kid wants, let alone 3 or 4 presents!” Yeah, probably not…when you pay full-price! Remember, if a gift your child wants costs $50, don't pay $50 for it! Keep your eye on it throughout the year. I have some GREAT gift-giving hacks to really help you save some money!
  • Push Yourself – If you can afford more, I totally understand the challenge. As a rule, just make the budget tight! Challenge yourself! Force yourself to take time to carefully think through, plan ahead, and strategize for their gifts…rather than just waltz into the nearest toy or electronics store and walk out 30 minutes later with Christmas over and done with. Your Christmas will be better for it. It's totally possible!

All-in-all, please keep the bigger picture in mind this Christmas. Challenge yourself to hold back on the spending and I promise you, it will be just as great of a Christmas as any other…if not greater. Have any other questions on how much to spend on Christmas? Let me know in the comments below!

Image with text that reads "how much to spend on Christmas" from Fun Cheap or Free


While you're working on your budget… Don't forget about my Secret Sauce online budgeting program, Budget Boot Camp! It's a super fun video program that makes money easy to understand. All you need is a screen and you're set!

And don't forget, if you don't save at LEAST what you paid for the program, I'll refund every dime. You've got nothing to lose! Use the code FCFBLOG to get an extra 10% off, because I love you 😉

Looking for more festive ideas?

A Merry Christmas to all!

Jordan Page Signature from Fun Cheap or Free


  1. Aimee

    Growing up, even when we believed in Santa, my parents still told us “you have $75 this year” or whatever and then we looked through the toy catalog & new what was realistic. We always had a great Christmas and I never remember being disappointed ever. I think we put too much pressure on ourselves to get as much as we think other people are getting their kids or heaven forbid they don’t get everything on their wishlist. I totally agree with what you’ve written so far & am looking forward to the next parts:)

    • FunCheapOrFree

      Couldn’t have said it better! And I miss catalog days 😉

  2. Amber Tully

    So pumped I came across this!!! And YOU!!! I love Pinterest as much as you 😉 You just saved my sanity and my heart with this article as I was wondering HOW in the world we would pull christmas off with only 4 weeks of paychecks left and this year not being able to put money away. Cannot thank you enough!

    • FunCheapOrFree

      Wow thanks for the sweet comment, Amber! Have a great day! XO

  3. Ruth Parytka

    Like the others who’ve commented here, the pressure is internal to pull together a satisfactory Christmas. I think that it’s because no one is sure what to do about gift giving and there is a shroud of mystery about how well the gift will be received! As a first time Mom, there are certain people I want to gift well that are now part of my life – like my child’s daycare providers. They’ll get $245 amongst 4 people, with $100 going to the owner of the daycare. I am following my heart on this one which makes it alright, but I do wonder about averages, standards, expectations and social norms.

    So yeah, I’m freaking out about this holiday year, but it’s good to read blogs like this so I can remind myself that it’s all going to be OK. Aside from daycare gifts, I’ve all but stopped gift giving and offered my time as THE gift instead.

  4. Jenny M

    The part II isn’t working for me, it just goes to Oart 1. I’m eager to see your part 3 also once it’s published.

  5. Kamryn Carlson

    Amazing advice! Can’t wait to read the other parts!

  6. Kathleen

    I really enjoyed reading this post. It gave me a lot of insight – so thank you! Christmas isn’t just about gifts, but for some reason it is always SO hard to remember that! We only have one kid and a lot of disposable income, so it’s easy to super spoil her on Christmas. But you were right about everything you said – I think my husband would especially agree with you because he’s always the one asking me if I even remembered what I got as a kid.
    The only thing I slightly disagree with, but this is just my opinion, is the not giving clothes. In December I save everything I buy for my daughter (or almost everything) that I would normally just give her, and wrap it all up, and then it looks like even more to put under the tree and you kind kind of stretch Christmas a little further. She loves to get a few pretty dresses and maybe a new pair of boots, and then it looks like Santa left even more stuff!

    • Fun Cheap or Free

      So glad you liked it! We have plenty of friends who give clothes as Christmas presents. We just don’t because we do our shopping for kids’ clothes a little bit differently (you can learn about that HERE in case you don’t know). But if there’s a pair of expensive shoes that they’ve really been wanting or something that wouldn’t fit into their clothes budget, they can ask for that for Christmas in place of other things. They know we have a budget for Christmas gifts, so they have to choose what’s more important for them to receive under the tree!

  7. Danielle

    Are the stocking budgets included in the recommended amounts above, or do you count that separately?

    • Fun Cheap or Free

      You can read ALL about how we do stockings HERE!


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