How Much is Too Much to Spend on Christmas?

Giving gifts is one of my love languages. Finding that perfect gift for someone is one of my favorite things to do. Sometimes it’s something someone needs and other times it’s something they wouldn’t otherwise buy for themselves, but secretly really want it. I also love surprises and it’s why I didn’t find out the gender of my kids before giving birth!


Christmas spending can get way out of hand if I am not careful. As a Dave Ramsey Preferred Coach, budgeting is extremely important to us as a family. So how do we budget for Christmas when we have 5 kids with ages ranging from 12-18?


1) We save $250 every month of the year and put it into a savings account. That gives us a total of $3,000 to spend in November and December. Keep in mind we are completely debt free and it includes gifts for clients which can be written off on our taxes as a business expense.

a. How do you figure out what is realistic to spend? The guideline is 1-2% of your annual income.

b. This is the range based on these criteria:

i. You aren’t in debt.

ii. It doesn’t impact your other financial goals.

iii. You aren’t going further into debt to spend that amount.

c. If you are in debt or want to put more toward other financial goals, then give yourself grace to do that. The important thing is to set a budget for yourself that you can afford and doesn’t add to the debt you already have.


2) We breakout the budget into specific categories. This helps us stay on budget while we are shopping. This is how the $3,000 breaks out.

a. Kids: $250 for each of the five kids for a total of $1,250

b. My husband and I: $50 each for a total of $100

i. We tend to spend quite a bit more on our birthdays for each other.

c. The kids do a secret Santa gift exchange and they pick out one gift together for my husband and me: $40 each of the seven of us for a total of $280

d. Other family and friends: $250

e. Business gifts: $250 (This is clients and co-workers and not breaking it out in case they are reading this, but we have a list.)

d. Money in case Santa needs help with the stockings: $40 for each of the seven of us for a total of $280.

e. Summer Vacation: $590

i. This is a one off for us this year. See below.


3) Sometimes we decide to put the money we have saved towards a family experience or new decorations. We are spending less on the kids (a little) and ourselves (a lot) this year, so we have extra money for a trip next summer. The kids will find out on Christmas Eve where we are going!


Don't forget to budget for extra charity giving, family photos, Christmas cards and Christmas dinner as part of your budget plan.


Finances can be so stressful and sometimes that comes from the pressure to spend money we don’t have on others. Reminding ourselves that we can be setting a great example for others by creating and sticking to a budget can help. It also challenges my fellow gift givers, including myself, to be creative and come up with ideas and experiences that won’t break the bank. Happy shopping!

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