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How To Actually Save Money on Christmas Gifts This Year

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Now that we’ve crossed the Halloween threshold, the Christmas season is fast upon us.  Many of us would just like to spend the holidays with our family without the added pressure of choosing the perfect gift and then wrapping it so well Martha Stewart would be in awe.

In fact, I will go so far as to venture that most of us feel that way.  The problem is, that no one will be the first to step up and say so. Here are a few ways you can save money on Christmas gifts this year.

Well, I hereby endow you with the authority to stand up and say, “From this day forward we will no longer buy each other useless crap we can’t afford and really don’t want anyway!”

Feel that? Feels like freedom baby.

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Let’s take a look at a few ways that we can stop the gifting madness but still have a great or even better Christmas.  Please keep in mind that you can’t spring this on people on December 21.  Some people are freaks and will already have next year’s gifts purchased and wrapped by then.

Have this conversation via group email now or at the very latest, over Thanksgiving when everyone is more pliable from tryptophan and booze.

The 5 Gift Rule

The basic idea is instead of spending a lot of money on a bunch of presents to fill up space under the tree, you limit the number of gifts to 4 unique items for each to help make holiday shopping more manageable (and your family more appreciative). Now, there is the five-gift rule adding one more essential category, experiences.

The 4 gift rule is easy to understand the way to teach children that they can’t have everything they want. You buy your children four gifts, one from each of four categories:

  • Something they want
  • Something they need
  • Something to wear
  • Something to read.
  • Something to experience.

And you don’t have to spend a lot on these gifts.

There are lots of good reasons to follow the five-gift rule that doesn’t have anything to do with raising grateful, non-greedy children. So much of what is made for children is plastic junk that will sit in a landfill somewhere not degrading for hundreds of years. And it comes packaged in more plastic.

Family Together Gift

Rather than buying multiple gifts for each member of a nuclear family, buy one gift for the whole family or couple.  A Netflix subscription, a membership to a local museum or zoo.

Themed gift baskets are also great. A Movie Night basket can be filled with snacks, personalized popcorn bowls, and candy. Or a Taco Night basket with all the accouterments, taco holders, margarita glasses, or a fun Mexican cookbook. There are endless ideas for gift baskets. You can find 15 great ideas here.

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Secret Santa

I know, I know. When you hear Secret Santa you’re thinking all those gifts will be goofy, cheap, and impractical but it doesn’t have to be that way! You just have to lay out the rules. You can make a higher spending limit (that everyone is comfortable with) and be clear with no gag gifts.

Instead of buying gifts for ALL your friends or family, everyone can draw one person’s name and become that person’s Secret Santa.

Instead of spending $200 on ten gifts at $20 bucks, anyone would be happier spending $100 on one special gift. You can even have people create a wish list of a few things they want to need so no one is stuck on what to get. A Secret Santa will save you money and time.

Dinner or Night Out Together

This one will work great with friends as well as family.  Let your friends know that you would like to do something with them rather than buy each other gifts.

A few years ago my best friend and I went to a performance of The Nutcracker at Lincoln Center and then had dinner at a nice restaurant.  She paid for the tickets, and I paid for dinner.  It was a great evening and much more memorable than buying each other sweaters.

Make Presents

Even if you aren’t the crafty type there are plenty of easy DIY gift ideas that won’t take you much time or artistic talent at all.


DIY gifts are personal, memorable and one of a kind. Pinterest has so many great ideas. If you like to cook, you can bake a sweet treat, and put it in some pretty holiday tins. If you need some inspiration, we have 15 easy DIY gifts here. Nothing says Happy Christmas like something homemade.

Gifts for Children Only

I think this only works if all the siblings have kids.  It doesn’t seem fair that the child-free person in the family gets stuck with the bill for their seventeen nieces and nephews and gets nada in return.  So tread carefully here.  But honestly, once you’re too old for toys, Christmas gifts are never really the same.

You are unlikely to be as excited and happy as a four-year-old unwrapping a Cabbage Patch Doll, Furby, Tickle Me Elmo, whatever the must-have toy is that year, no matter what you get.

A Vacation

Depending on the size of your family and your choice of destination, this may not be the cheapest option.  But it is the most fun.  I did this for the first time two years ago.

I wanted to see my family, but they don’t live somewhere easily accessible from NYC.  So I suggested we all meet up in New Orleans.  Well, one member had been spending Christmas with his family his whole life, he wasn’t sure. He only felt obligated, and it was just what he had always done, so it was what he always did.

On Christmas Eve sitting at Pirate’s Alley Café drinking absinthe in 70-degree weather, lightning struck.  He realized it was the best Christmas he had ever had.  No fighting, no arguing, no biting his tongue.  Just the holiday with people he wanted to spend time with.  Couldn’t believe he hadn’t done this years ago and had done it every year since.

You don’t have to spend Christmas with your whole extended family.  You can take your own little family and go somewhere great.

I’ll recommend New Orleans as I often do.  It is magical any time of year but at Christmas, there is just something else.  No decorating, no cooking, no fighting.  Just fun and food and family in the setting of your choice.  Consider it.

No Gifts At All

Ok, this is the nuclear option and won’t work for everyone.  But it’s an option never the less.  It’s all in the way you approach the conversation.

Use a little finesse.  If your family is pretty small and you’re close, explain that things are tight this year and you would like to forego giving or receiving gifts.

If you have a big family, give the old speech about how Christmas has gotten too commercial, robbing the holiday of its real meaning, family togetherness.  Or whatever.  You Norman Rockwell types need to give the rest of us some pointers on how to pull this off in the comments because I’ve got nothing.

Happy (cheaper) Holidays

So those are some ideas to help you put the brakes on the stress that the overspending causes during the holidays.  If any of you take the leap and do the vacation idea, let us know where you went and how right I was that it was the best idea you ever had.

If any of you try to pull any of this off and are disowned, I’ll be in New Orleans again this year so come on down, and I’ll buy in absinthe.

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Candice Elliott - Senior Editor Candice Elliott is a substantial contributor to Listen Money Matters. She has been a personal finance writer since 2013 and has written extensively on student loan debt, investing, and credit. She has successfully navigated these areas in her own life and knows how to help others do the same. Candice has answered thousands of questions from the LMM community and spent countless hours doing research for hundreds of personal finance articles. She happily calls New Orleans, Louisiana home-the most fun city in the world.

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